Signals: Russia, Iran, Turkey – A Syrian Strategic Triangle

Impact on Issues and Uncertainties ? Degree of influence of Russia – and now possibly Iran – on Turkey compared with Turkey’s perception of threat related to a Kurdish polity on its southern flank (critical uncertainty) ➚➚ ➃ Turkey’s perception of threat ➚➚➚ ➃ to ➂ Survival of the Kurdish-led Federation of Northern Syria➚➚ ➄ to ➂ Constructive peace for Syria ➘ ➃ to ➂ Middle East Tension➚ Iran influence➚➚ ➃ Russia influence➘ Threat to Israel➚➚ ➃ U.S. influence trial – likely leading to ➘➘ U.S. influence ➚➚ ? ➁ U.S. Russia global tensions ➘ Western NGOs and then businesses prospects in Syria On 1 November 2017, the President of the Russian Federation Vladimir Putin and the President of Islamic Republic of Iran Hassan Rouhani met in Teheran.For previous and other signals check the Horizon Scanning BoardFriendly statements followed. Iran …

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Everything you Need to Know to Understand the Islamic State’s Terrorist Attacks, Cope … and Fight Back

Whatever way one wants to see it, despite defeats in Syria, Iraq, Libya, and the Philippines, the Islamic State has not disappeared and will most probably remain a feature of our world for some times.

The regular terrorist attacks taking place throughout the world are there to remind us that to win over ideas – and the actions they prompt, a comprehensive strategy mirroring and superseding the strategy of the enemy must be designed and implemented.

Until then terrorist attacks will continue, as the 2017 Halloween attacks in New York in the U.S. and in Kaboul in Afghanistan show (Gina Cherelus, Daniel Trotta, Reuters, 31 Oct 2017; Reuters, 31 October 2017).

It is thus twice crucial to understand what is behind these attacks: to possibly counter them while withstanding them at best as long as real victory has not taken place.

Here is what you need to know to understand, cope, and possibly fight back the Islamic State terrorist attacks (with proper references, as we are in the realm of knowledge and not opinion here).

This compendium includes 11 selected articles – i.e 40733 words /  114,5 pages.

You can read freely below a short presentation of each article, and access the complete articles by becoming a member of the Red (Team) Analysis Society (quarterly, biannually or yearly subscription available).

On terrorist attacks more specifically

“The Psychological Impact of the Islamic State Terrorist Attacks“

Here we focus on the major socio-psychological consequences of terrorist attacks. We first explain the disconnection existing between direct exposure to the attack, objective threat and socio-psychological impacts, i.e. how people are impacted psychologically even though they are not in the immediate vicinity of the attack and how this phenomenon takes place. This will allow us better envisioning who can be impacted. We then turn to the more individual harmful psychological consequences of terror attacks, from Post Traumatic Stress Disorder (PTSD) to depression and insomnia and their impacts on businesses through impaired professional life. This will notably allow us pointing out that a crucial stakeholder for the corporate sector in terms of considering the Islamic State’s and Jihadist terrorist attacks and thus related geopolitical uncertainties is the department of human resources, which must thus be primarily involved, besides other more obvious departments such as security, risks, or sales, marketing, operations and finance. Staff in charge of exports and supplies must also become involved as the companies with whom they are dealing could be impacted by terrorist attacks. Finally, we shall turn to socio-psychological consequences with collective impacts, which have various effects on companies and de facto societies and countries, from avoidance (not doing something anymore, e.g. flying, traveling by train, visiting some countries, investing in some sectors and countries, etc.) to the rise of collectively aggressive behaviour…. read more.  4580 words / 12 pages.

Overcoming the (Western) mental confusion and trap when dealing with Islamist Terrorist attacks

“Fighting the Islamic State’s Terrorism at Home – The Third Way” to be able to “Truly defend… and Strike Back”

These two articles address the continuing and appalling confusion existing notably in Western countries when Islamist terrorism is at stake.  In the midst of the caricatural debate according to which we would have the choice only between hiding the Salafi character of these terrorist attacks because they would be understood as “Islamophobia”, on the one hand, or focusing on immigration mainly as a universal panacea, on the other hand, French terrorist prosecutor Molins shows us the way forward towards finding a new and third way.  We must assess coldly the threat first with all its components, before to look for solutions second. Fighting the Islamic State’s Terrorism at Home – The Third Way (the assessment  3585 words / 10 pages) and Truly defend… and Strike Back” (possible ways forward – 3137 words / 10 pages) are a contribution to this endeavour.

“The Islamic State and Terrorist Attacks: License to Kill”

In the light of the ongoing terrorist attacks, it is crucial to understand the perspective and position of the Islamic State as far as these attacks are concerned. This is what this article does. It thus  defines the framework for the Islamic State’s – and its members’  intentions, as well as  identifies sensitive points in terms of legitimacy. From there, we may notably deduce a number of elements and factors that could be useful, in particular to intelligence services and political authorities, to screen and prioritize entities that could be, or not, possible targets, and to identify potential new threats. Conjointly, sensitive points, and discrepancies in messages, may also be used, as we shall point out at the end of the second part and in the third part below, to craft counter-psyops, counter-radicalisation and even psyops messages… Read more. 3463 words / 10 pages.

The Islamic State’s permanent all out war

The terrorist attacks of the Islamic State can only be understood if one, first, makes the effort to change one’s perspective to see the world through the eyes of the Islamic State. It is this vision that underlays the attacks. This does not mean accepting or legitimating the Islamic State. It means using good red teaming analysis, and taking the measure of the enemy … to win.

 “Worlds War“

Using material from the Islamic State propaganda, we address, first, doubts and denials that were aired following the Paris attack, notably in the media and general public, and which tend still to inform the general misunderstanding on the Islamic State, regarding the reality and nature of the war with the Islamic State. We then turn to the Islamic State and its Khilafah to better understand their perception of the political order and of the related entities they are creating, or had created, and finally consider a first impact of that vision and related actions, an assault on modernity, and what that means in terms of responses…. Read more.  3468 words / 10 pages.

“Ultimate War“

This is the second part of our analysis of the Islamic State’s worldview and of its impact.

We first show that the Islamic State’s belief-system deeply questions and changes the perception of what is domestic and what is foreign, then that it destroys the very notion of civilians and non-combatants. We then draw conclusions regarding the type  of war that is emerging as a result of the Islamic State’s Weltanschauung (German philosophical concept referring to the deep underlying conception of the world held by one or many actors) – with potential tremendous impact for us in terms of vision, strategy and warfare – knowing that those findings will need to be refined and eventually revised as the war unfolds and as actors evolve and change…. read more. 4291 words / 11 pages.

The global perspective of the Islamic State and its impacts

The global perspective of the Islamic State demands that we understand the Islamic State fight in a global way. It is neither limited to a war that would be classically understood, nor to a specific bounded territory, e.g. Syria, Iraq, Libya etc.

“A Global Theatre of War“

After the Winter 2015 strings of terrorist attacks, it had become even more obvious than previously that the Islamic State fights globally. This article suggests that one also needs to integrate a global geographical level to our response to correctly fight the Islamic State. First, we recall that the Islamic State and its Khilafah are inherently a global warrior polity, thus aiming at operating globally. Second we look at what we knew of the capacity of the Islamic State in November 2015 to reach out globally, and underline dynamics operating between different components of this capability. Even though the capabilities of the Islamic State have now changed and been seriously reduced, the understanding and dynamics at work are still valid and must be considered. Finally, we turn to the last element of the very capacity to act globally, the scope of the Islamic State global imprint…. Read more.  4003 words / 12 pages.

Early warning… “The Islamic State, from the Philippines and Indonesia to Bangladesh“

This article ends the part of our series singling out risks to a strategy that would only or mainly pay attention to one theatre of war and to one dimension and focusing on the Islamic State global geographical implantation. It looks at then maybe less known cases of global outreach for the Islamic State and its Khilafah: Malaysia and Indonesia, as well as the Philippines in SouthEast Asia and Bangladesh in South Asia. This article written in January 2016 constitutes an early warning for the siege of Marawi in the Philippines, which took place over the Summer and beginning of Autumn 2017, as well as for the increasing imprint of the Islamic State there, for example. … Read more.  3525 words / 10 pages.

But who carries out the terrorist attacks and why? Why do Asian and European citizens join the Islamic State?

 “A threat when returning… but also when staying”

We explain the risks entailed by the existence of and increase in mobilization abroad, or, more specifically, outside the territory the Islamic State rules or has conquered. This inflow of foreign fighters can be seen as a security issue for three major reasons. First, it enhances the Islamic State’s fighting power. Second, it leads to a threat to see attacks carried out at home by those foreign fighters, not only once they come back, but also if they are stopped leaving. Finally, the symbolic impact of a successful foreign mobilization interacts with the connectedness of each mobilised foreign individual to enhance the power of the Islamic State psyops and potentially intensify the first two elements of the threat…. Read more. 2989 words / 9 pages.

How and why the Islamic State attracts “foreign” fighters

“Attracting Foreign Fighters” (Part 1)

We first present the set of Islamic State psyops “recruitment” products used, notably initially before a crackdown took place on social networks and before the Islamic State lost in Mesopotamia. We then turn to the framework for understanding established by existing research. We then focus upon two necessary elements that were identified as present in most or all fighters that were recruited: a quest for purpose and meaning, as well as a search for belonging. Those elements are at the core of a first complex around which messages and features favouring mobilization are organised and that we shall detail with the next post, which will also focus on the second complex, organised around the theme of authority, rules and exercise of liberty…. Read more. 3661 words / 10 pages.

“Foreign Fighters’ Complexes” (Part 2)

This article further refines, always using the Islamic State recruitment psyops products, the various elements identified by previous research, which we understand as organised in two complexes*, the first constellated around the core “quest for meaning and related need for belonging”, and the second around authority, rules and exercise of freedom…. Read more. 4031 words / 10,5 pages

Signal: Russia to Support Deeper Involvement of Kurds in Post-War Syria

Impact on Issues and Uncertainties ? Degree of influence of Russia on Turkey compared with Turkey’s perception of threat related to a Kurdish polity on its southern flank (critical uncertainty) ➚➚ ➃ to ➂ Survival of the Kurdish-led Federation of Northern Syria➚ ➃ Russia influence trial As the seventh round of Astana talks proceeds (30 Oct-31 Oct 2017), Russia’s envoy Alexander Lavrentyev stated:“The question arises on how to involve the Kurds more actively in the post-conflict restoration and political resolution.”This statement, as well as the federal design for Syria Russia favours,  would let us expect that Russia will support the Kurdish led project, i.e. to see their Federation of Northern Syria within a united Syria survive and strive. As a result, the survival of the Kurdish-led project …

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Signal: Spanish Stabilising Reassertion of Rule over Catalonia

Impact on Issues and Uncertainties

? ➂ Perceptions, reactions and interactions outside Barcelona, notably in independence towns and areas, as well as outside major “central regional” political and civil servant circles (critical uncertainty).

➘➘➘ ➁ Large peaceful civil resistance and disobedience across Catalonia for Independence

➘➘➘ ➁  Civil Unrest in Catalonia against Spain

➘➙ ➁ Secessions and deep changes of nations within the EU… and globally

We identified with previous signals that two uncertainties were critical to see stabilisation or, on the contrary, escalation, taking place in Catalonia over its independence.

One of them was the capability of the Spanish government to reassert its rule over the break away region in a stabilising way, notably without violence. This is what Madrid has so far succeeded in doing.

The second was the willingness of the proponents of an Independent Catalunya to stand up at all costs for their ideal and goals, while also remaining true to their non-violent commitment. This is not what the ruling political authorities appear to have done. On the contrary they extremely quickly submitted to Madrid’s, from acquiescence of deputies not to convene, to the running away of the Catalan executive, to the union’s cancellation of a general strike, to acceptance of new elections decided by Madrid – which de facto deny the reality of the previous independence declaration – to the absence of peaceful and civil disobedience by civil servants. If we seek falsification, to see this rapid submission transformed into a stand for independence, we would have to imagine a grand scheme designed to lull Madrid into confidence to allow for the organisation of a massive civil disobedience movement. This sounds highly unlikely, although of course not impossible.

Nonetheless, the situation outside Barcelona, notably in pro-independence towns, as well as outside civil servants and elite circles should be also surveilled for better analytical judgement on the future, as such collective processes could indeed take place, and thus constitute a new critical uncertainty.

In conclusion, the monitoring of the uncertainties initially identified would indicate that the situation is likely to be stabilising Catalonia, assuming nothing derails the current trend, and no new development takes place outside Barcelona and regional major political circles.

Spanish prosecutor accuses sacked Catalan leader of rebellion

BARCELONA/MADRID (Reuters) – Spain’s state prosecutor accused sacked Catalan leader Carles Puigdemont of rebellion and sedition on Monday as the former regional president traveled to Belgium with other members of his ousted administration and hired a lawyer there.

Towards the End of the US Dollar Supremacy? How Currency Internationalization Impacts State Power

In this article, we shall look further upon the impacts that currency internationalization has not only on the issuer’s economy but also on its foreign policy, international power and status, as stemming from each currency function (medium of exchange, unit of account, store of value, both at the private and the public level).  This will notably allow us to understand the main signals and data that we shall have to monitor and analyse to assess the future of the US dollar supremacy and, consequently, the effects that its eventual collapse could have at the international level.

In the previous article, we started pointing out that currency internationalization brings benefits and costs to the issuing country from both an economic and a geopolitical point of view, focusing notably on fundamentals.

Executive Summary

Continuing in laying out the necessary basis to examine challenges to the US Dollar supremacy, this article focuses upon the impacts that every single international currency function (medium of exchange, unit of account, store of value, both at the private and the public level) has not only on the issuer’s economy but also on its foreign policy, international power and status.

First, the impacts that the medium of exchange and unit of account functions have on the issuer’s country are not only economic benefits, including reduction in transaction costs, and denomination rents, but also an increase in soft power. On the down side, when a currency acts as an exchange-rate anchor (unit of account function at the public level), it can cause limitations in independently determining the value of the currency.

Second, the most relevant effects to the economic and geopolitical power of the issuer come from the two store of value functions. These take the form of an enhanced macroeconomic flexibility that allows to run important current account deficits. Furthermore, the issuing government can also take advantage of the greater centrality of its financial markets to impose sanctions on rival countries and offer side-payments. The store of value functions also enhances the ability to finance military spending.

Finally, we highlight that the possibility to exert influence on the international arena also depends on the presence of alternatives to the home currency (supply) and on the value of the assets denominated in the home currency but held by foreigners (demand).

In conclusion, stressing the importance of trade in determining the composition of foreign exchange reserves, we introduce the pivotal role of the petrodollar system, which will be explored with the next article.

Full article 2278 words – approx. 7 pages

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Our next article will therefore dig deeper into the role of petrodollars and explore its link to the status of the US dollar on the world stage.

About the author:  Leonardo Frisani (MA Paris) focuses currently on challenges to the US Dollar supremacy. Beyond that, his specialisation is in international security, and his main interests are in geopolitics, macroeconomics, climate change, international energy and history.

Main references

Bank for International Settlements (2016), Foreign Exchange Turnover in April 2016, Monetary and Economic Department.

Cappella, R. (2014) “Economic Statecraft and Power Redistribution during Wartime: Lessons from the Sterling Era and the Future of America’s Military Might”, Boston University.

Cohen, Benjamin J. (2015) Currency Power. Understanding Monetary Rivalry. Princeton: Princeton University Press.

Harstad, B., “Do side payments help? Collective Decisions and Strategic Delegation”, Journal of the European Economic Association, April-May 2008, 6 (2-3) : 468-477.

Insana R., “What China selling US Treasurys really means”, CNBC, 15 October 2015. Retrieved: 26 October 2017.

International Monetary Fund, Annual Report on
Exchange Arrangements and Exchange Restrictions (Washington, October 2016).

Jenkins, L., “Panama’s Banks Face Ruin”,  The Washington Post. 10 April 1988. Retrieved: 18 October 2017.

Newsweek Staff, “A timeline of U.S. Aid to Pakistan”, Newsweek, 20 October 2009. Retrieved: 23 October 2017.

Swoboda, A. K. (1968), The Euro-Dollar Market: An Interpretation, Essays in International Finance 64 (Princeton, NJ: International Finance Section).

Viotti, P. R. (2014), The Dollar and National Security: The Monetary Component of Hard Power. Stanford, CA; Stanford University Press.

 

 

Signals: Talks between Iraqi forces and Kurdish Peshmerga; President Barzani Steps Down; Iran…

Impact on Issues ➚ ? ➃  Short term – Willingness of Iraq to capitalize further on their military victory against the Kurds, notably capturing Kurdish oilfields (uncertainty)? Medium to longer term – capacity of Iraq to govern legitimately over its multi-sectarian multi-ethnic population (critical uncertainty) ➚ ➃  /➄ Iraq strength and international support ➘➘➘ ➂ Legitimacy of Iraqi Kurdish political authorities and parties➘➘➘ Prospects for Iraqi Kurds’ independence and even autonomy ➚➚ ➃  Iran’s influence in Iraq and in the region➘ ➙  Saudi Arabia’s influence➘ ? Saudi Arabia – Iran tensions ➚ ? ➃ Russia’s influence➘➘ ➃  U.S. influence ➘ ➄ Syrian Kurds prospects ➚ ➃  Russia’s influence trial in Syria➘➚? ➃ Middle East Tension As the internationally abandoned Iraqis Kurds appear to have, at least temporarily, not only lost their bid for …

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Signals: Catalonia Prepares for Spain Take Over

Impact on Issues

? ➂  towards ➃  The way Spain will practically implement the take over of Catalan administrations and institutions is critical (critical uncertainty)

➚➚➚ ➂ Large peaceful civil resistance and disobedience across Catalonia for Independence

➚➚➚ ➂  Civil Unrest in Catalonia against Spain

➚ ➁ Secessions and deep changes of nations within the EU… and globally

Update 15:45 – 27 Oct 2017 – The Parliament of Catalonia declares independence through a vote on related resolution (70 votes in favour, 10 against and 2 blank ballots, the remaining deputies abstained and had left the parliament, boycotting a vote they considered as illegal).

On 27 October 2017, Spain has obtained the Senate approval for the application of Art. 155 of the Spanish constitution against Catalonia and implementation of direct rule on Barcelona, thereby ending at least temporarily the autonomy of the region (vote results: 214 in favour, 47 against 1 abstention – Update 16:55 27 Oct 2015).

According to the decision taken by the President of the Spanish government Rajoy, Catalonia’s government will be “removed from office”, within six months, the new Spanish-backed authorities will dissolve the Catalan Parliament and early legislative elections will be called. Until then, the Catalan Parliament will be under “series of control measures”. In the meanwhile, all departments in Catalonia’s administration will be taken over by Madrid’s central power, including Catalonia’s police, the Mossos d’Esquadra, new institutions if believed useful could be created. The Catalan governmental media likewise will be under Madrid’s control.

On Thursday 26 October, Carlos Puigdemont, President of the Catalonia government, decided not to call for early elections, when many expected him to do so. He stated that the absence of guaranteed from Madrid, regarding deciding not to apply Art. 155 if he did call for elections, led him to this decision. It would seem that behind the scenes, the majority of the parties composing the pro-independence alliance, Junts pel Sí, were opposed to early elections and wanted to move on with independence, as stated by Vice President Oriol Junqueras.

As a result, as the Spanish Senate holds its session, the Catalan Parliament is also to gather (session meant to start at noon CET) to decide about the course of action to choose regarding Art. 155. The decision is likely to include a formal declaration of Independence, considering the composition of the Catalan parliament (72 seats potentially for independence against possibly 63 in the opposition thus potentially opposing independence). However, every individual vote will be crucial and surprise may also occur.

What may then happen?

It would seem that civil disobedience is to be expected that will try to prevent as much as possible Madrid to take over the Catalan administration.

Meetings have been held by pro-Independence Deputies all over Catalonia to explain to people what to expect, which implies that the mobilisation of people, if need be, has started. Spontaneous meetings seem also to have been held across Catalonia to reject the application of Art. 155 by Madrid.

The Catalan police force would appear to be divided between pro-independence and anti-independence forces. It is however likely that, considering belief in the chain of command, the Mossos d’Esquadra will not – except serious mistakes made by Madrid – at least that early in the process, act beyond passive resistance for independence.

Finally, the official language used, for example, by Carlos Puigdemont in its latest statement, has started to change: he specifically mentions that those “adding more tension” are  the “People’s Party”, and not anymore the Spanish government, which thus brings forward the spectre of Franco’s rule. This would tend to indicate an ideological escalation too.

Thus, what we may expect to see initially is a very large civil resistance and disobedience movement, however essentially non-violent, settling throughout Catalonia.

It is possible that this type of resistance would also take place even if the Catalan Parliament bowed to Madrid.

The way thus Madrid will implement the activated Art. 155 will be crucial in moving the country towards, this time, violent unrest, or on the contrary, in stabilising the situation.

Considering, however, the intransigency displayed so far by the Spanish Government of the People’s Party led by President Rajoy, we may fear a too heavy-handed Spanish application of Art. 155, thus further escalation.

Official Statement by the President on the approval of Article 155

In these last hours, before my authority to hold parliamentary elections expires as a result of the measures proposed by the Spanish government in the application of Article 155, I considered the possibility of exercising it and calling for an election.

Catalan VP says Spain ‘gives us no option’ but to secede

BARCELONA, Spain – Spanish authorities are leaving separatists in Catalonia with “no other option” but to push ahead with declaring independence for the wealthy northeastern region, its vice president said Wednesday. Spain has announced plans to fire Catalonia’s government and directly manage its affairs after it held an independence vote that was declared illegal by the country’s constitutional court.

Demoralised and divided – inside Catalonia’s police force

With the Spanish government ready to take over the running of Catalonia on Friday, the loyalty of the local police to Madrid or to the Catalan cause will be tested if they are ordered to drag their former political masters from office.

Speech by President of the Government following extraordinary meeting of Council of Ministers, Moncloa Palace, Madrid, Saturday 21 October 2017

Spain Extraordinary Meeting of the Council of Ministers, 21 October 2017 – Summary

ACUERDO EN RELACIÓN CON LAS MEDIDAS A QUE SE REFIERE EL ARTÍCULO 155 DE LA CONSTITUCIÓN –Full text – Official publication – application Art. 155 to Catalonia

Signal: Turkish President Erdogan Declares Afrin as Possible Next Military Target

Impact on Issues ? ➄ Bashar al-Assad government decision regarding the further Turkish military actions regarding the Federation of Northern Syria and the Kurds (critical uncertainty)? ➄ Iran position considering a Turkish military action in Syria against the Federation of Northern Syria and the Kurds (critical uncertainty) ➚➚➚ ➃  Turkey acting militarily against the Federation of Northern Syria in Afrin ➚ ➚   ➃ Iran influence➚  ➄ Syrian future ➚  ➃ Israel perception of threat ➚ ➃ Middle East Tension ➚ ➃ Russia influence trial➚ ➃ U.S. influence trial Turkey President Erdogan old the parliamentary group of his Justice and Development Party (AKP) on Oct. 24 that:“Our operation in Idlib is nearly complete. Ahead of us is Afrin. These are threats to us and we will never make concessions to such threats.”For previous and other signals …

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Signals: China’s Xi Jinping Thought, Real Economy and … Global Finance

Impact on Issues

➚ ➁ China opposes the financialization of the Chinese economy
➚ ? China will have to oppose the actors of global finance (high uncertainty)

➚  Successful development of Chinese economy
➚ Improvement of the economies of “countries under financialization” (e.g. most of Western countries)
➚ Restart of prosperity trend within “countries under financialization” (e.g. most of Western countries)
➚ Lowering inequalities within societies under financialization (e.g. most of Western countries)

➚ China influence
➚ Perception of a benevolent China
➘ U.S. influence
➘ USD supremacy

Warning (threat): Turmoil as battles take place between China and the actors of global finance, and their respective supporters
Warning (Opportunity) – Longer term: Towards a change of the actors of global finance towards less predatory finance

As the 19th Communist Party of China (CPC) Congress closes, Xi Jinping, his vision, power and actions are consecrated through the enshrinement of Xi’s thoughts on “Socialism with Chinese Characteristics for a New Era” in the CPC constitution.

Notably, this means that the Chinese political authorities declare a commitment to “providing a better life” … to Chinese people. The ways and means to achieve Socialism with Chinese Characteristics for a New Era and this better life are numerous, as described in the 3.5 hours speech of Xi Jinping and aim at building a country by 2050 that is “‘prosperous, strong, democratic, culturally advanced, harmonious and beautiful,’ incorporating ‘Beautiful China’ into the development plan”.
Meanwhile, the Chinese also are at pain to emphasise that their new vision and commitment will too bring happiness and prosperity to the whole world.

Some commentators, such as the Forbes’ article selected as signal below, point out nonetheless the very real risks to foreign companies, and the difficulties entailed by forced technological transfers, for example, or by a globalization and free trade that China promotes for others, but which is applied differently when foreign firms want an access to the Chinese Market.

Beyond these risks and possible contradiction, an attentive reading of Chinese commentaries in official Chinese media such as Global Times (i.e. approved thoughts), would also point towards another extremely interesting indication. If we follow Toumert AI, director of Education, International Bachelor Program at the International School under the China Foreign Affairs University in its 23 October Commentary “China’s economic governance will benefit the entire world”, we read that:

“First, we noticed a call for giving priority to the real economy. If we’ve learned anything from the global financial crisis of 2008, it is that any economic model that does not focus on the public as a whole will only widen the gap between the rich and poor, and between the real economy and the financial one.”

We may thus wonder if China will not oppose the financialization of the economy and, as a result, the “actors of global finance” – those actors promoting and benefitting from extreme financialization – to the least within China. Other signals prior to the CPC Congress would point in a similar direction, as exemplified by the August article “China’s Financial sector must resume role of serving real economy” (see below).

This issue – China vs Global Finance – must be put on the watch, as the war will most probably be momentous considering the means of each type of players and the mammoth stakes. It will also be necessary to envision that it will likely take place on a global scale and not only within China, as the actors promoting global financialization are indeed global.

Interestingly, one of the possible impacts of this possible war could be an improvement of Western economies and of the lives of Western working and middle classes.

Indeed, Chinese development has also contributed – among others – to the impoverishment of millions of workers in “advanced economies” and to the dwindling away of the Western middle class, which, in turn favoured, among others, the rise of populism. Thus, if China wants sincerely to be seen as a benevolent power, worldwide, it must also pay attention to see this adverse trend stopping, yet without endangering its own rise and objectives. If we look for other factors that stop the West to recover from the financial crisis and to see prosperity for all starting again, rather than seeing inequality rising perpetually, we find indeed the financialization of the economy, the absence of investments because returns are never high enough in the real economy, predatory finance and its buy-backs of shares rather than proper productive corporate policies, etc.

As a result, we may wonder if the possible war China could be starting for the real economy would not indeed derail the current financial predicament into which the world and more particularly the West lives. As battles take place, the financial world will have to change, even though the various faces these evolution may take still need to be envisioned.

We may thus be warning, for once, about an opportunity, save for the proponents of predatory finance.

 

China’s economic governance will benefit entire world – Global Times

As General Secretary of the Communist Party of China (CPC) Central Committee Xi Jinping delivered a speech at the opening session of the 19th CPC National Congress on Wednesday, a new paradigm of economic development and governance was announced that will have a deep impact on China’s future in the 21st century.

China’s Financial sector must resume role of serving real economy – Global Times

The relationship between the real economy and the financial sector has always been the core subject of macroeconomics. In essence, positive interactions between the two are not only the basis of national financial stability and security, but also the foundation of sustainable development of the national economy and even the world economy.

CPC Constitution enshrines Xi’s thought as part of action guide – Global Times

An amendment to the Constitution of the Communist Party of China (CPC) was approved Tuesday, making Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as a new component of the Party’s guide for action, according to a resolution of the 19th CPC National Congress.

CPC commitment in new era: a better life – Global Times

In many other countries, serving the people is an empty promise, but in China people are precisely the focus of politics. It is their needs that form the entire focus of all policy. This is socialism. To build a better life is the Party’s commitment to the people in a new era.

Infographic: The Thought on Socialism with Chinese Characteristics for a New Era – Xinhua | English.news.cn

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China First: Foreign Tech Terms Must Be Wary Under Xi Jinping’s Rule

Using the the twice-a-decade Communist Party Congress as his platform, President Xi Jinping has laid out his sweeping plan to make China a leading global power in influence, innovation and military might by 2050.

The elephant in the room | Barclays Investment Bank

Hyperglobalisation’s disproportionate effect on the distribution of global wages, explains much about the rising protectionist sentiment.

Featured Image: Xi Jinping, BRICS leaders meeting, 7 July 2017, Kremlin.ru [CC BY 4.0], via Wikimedia Commons.

Signal: Two Regions in Italy Vote Heavily for Autonomy

Impact on Issues

?  Italy, Lombardy and Veneto: towards autonomy?
? The end of an Italian nation?
? The future of the Italian State?
? The Italian South reaction ?

➚➚ ➁ Deep changes for the nations and their modern-state, and “liberal democracies”, within the EU… and globally (high uncertainty)

? The EU structure (including staff) and governance must change (high uncertainty)

? ➂  The new polities and climate change (high uncertainty)
? The new polities and the dominant powers (U.S., China, Russia)(high uncertainty)

Warning (Opportunity) – Opportunity to plan ahead for the EU and its member states, as well as worldwide?
Warning (Opportunity) – Opportunity to discard obsolete structures and work towards letting emerge new adapted ones

Two regions in Italy, namely Lombardy (Capital Milan) and Veneto (capital Venice) voted heavily for autonomy within Italy on 22 October 2017. Although only 40% and 57% of citizens voted, the vote for autonomy was massive for both, above 95% (preliminary counts).

These two regions represent respectively 20% and 10% of Italy’s economy, and want to use the referenda to demand Italy a larger say on their governance, indeed autonomy, not only in terms of taxes and public services, but also security, including immigration.

For previous and other signals check the

Horizon Scanning Board

As we pointed out previously, the impact of the European Union very political existence and dynamics is starting to become apparent in terms of the destruction or mildly the weakening of the modern state and one of its children the nations in their current boundaries.

If we also look at Catalonia (see corresponding signals in the Horizon Scanning Board), we start seeing an emerging outline in terms of the ideology and way the new “imagined communities”, to use Benedict Anderson’s concept, define themselves. It would seem we are witnessing a mix between the plutocratic ideology (profits and material wealth are paramount) promoted since at least the end of the Cold War, a return to old, historically constructed regional entities, reinforced by “nationalist” narratives, with a return to a cold “national interest” perspective, redefined along the novel boundaries.

On the shorter term and directly, the way not only the Italian State but also the other poorer regions will react, must be monitored.

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The issue must be kept under watch as the consequences abound. It will probably impact not only the European Union as an institution and as a governing body but also the Euro, and other European people. At a deeper level, it is the very modern-nation state and its nation that is also being transformed. We may particularly wonder how the multiple threats, first among them the impact of climate change, may be handled by the emerging new network of polities. In terms of foreign policy and international relations, how will these polities fare when faced with China, its ever consolidated state power, its One Belt, One Road initiative and its developing giant corporate sector such as in the digital domain, with an increasingly influential Russia, or with an uncertain yet trying to reassert its dominance America. In that regard, for European new polities and entities, we have for example the problems of dealing with security and defence considering NATO, or of handling the bullying regime of American sanctions.

What we are witnessing is likely the slow making of the new socio-politico model that will underpin our future political order, as we suggested when we put the future of the nation-state (and thus of “liberal democracies”) under watch.

Italian regions vote on more autonomy

Two of Italy’s richest northern regions are holding referendums to ask voters if they want more autonomy. Lombardy, which is home to Italy’s financial capital Milan, and the Veneto region around Venice together account for about 30% of national wealth.

Italy’s two richest regions seek more powers from Rome in nonbinding referendums | The Japan Times

Voters in the wealthy northern Italian regions of Lombardy and Veneto were deciding Sunday if they want to seek greater autonomy from Rome, riding a tide of self-determination that is sweeping global politics, most vociferously in Catalonia.

Featured image: Public Domain – Northern Italy, 1796 (for the campaigns of 1796-1805), The Historical Atlas by William R. Shepherd, 1926

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