The View
by

The world’s trade and stability rest on three men as they prepare to play the Great Game

PUBLISHED : Thursday, 15 March, 2018, 2:22pm
UPDATED : Thursday, 15 March, 2018, 2:22pm

For the first time since the formation of the North Atlantic Treaty Organisation (NATO), Russia has launched a chemical warfare attack against a member nation. The release of a dirty bomb in public that could wound or kill indiscriminately is a terrorist attack.

Such an attempted execution of an enemy of the leadership in a neutral country might be expected of North Korea, but not by a superpower in a leafy English suburb.

Naturally Russia denies the attack - and who wouldn’t? It was executed in such a cack-handed manner that even Johnny English couldn’t have done worse. No self-respecting state-sponsored spook would have left a trail of evidence that just about included their business cards, a fingerprinted glass full of DNA, and a note of confession. The attack is much more in the cock-up rather than conspiracy class, and the would-be assassins are likely to find more justice with their own kind than from the limp-wristed British government.

The military grade nerve agent, Novichok, was secretly developed in Russia and only discovered by the West after the Berlin Wall fell. It could only have been transported in a diplomatic pouch. If you are Russian, alive, and in Britain, you should be feeling unsafe – up to 14 other unexplained deaths of Russians are to be re-examined.

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It is a stretch to believe that a 66-year-old spy who was “retired” 12 years ago is really James Bond in tracksuit. The reason for the attack is likely to be a row between security units within Russia, or a lone wolf who mistakenly thought he might be doing President Vladimir Putin a favour.

Unsubtle incompetence is certainly not Putin’s style, which is considerably more thoughtful and elegant. There was no reason to worsen relations between the UK and Russia at this time, as that cuts right across Russia’s espionage and financial interests. Sanctions against Russian people or companies will almost certainly be mirrored in the US and, eventually, the European Union.

China has taken a different approach in the last week. President-without-term-limits Xi Jinping has taken action to tighten the central government structure, which is intended to reduce overlap and infighting. As a management technique, this is to be theoretically applauded. However, huge departments inevitably generate fewer ideas, less creativity, and are more influenced by the decision-making qualities of the department head.

Ironically, the mere thought of super bureaucracies would have been anathema to Chairman Mao. “Let a hundred flowers bloom; let a hundred schools of thought contend!” Discussion and debate looks messy but it provides robustness and renewal during periods of crisis when the best-laid plans are overwhelmed.

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The flowers are definitely blooming for democracy, which has never looked messier. Donald Trump is rampant; having replaced his first cabinet with thought clones. This includes West Point graduate and new Secretary of State, Mike Pompeo, and retired generals Jim “Mad Dog” Mattis (Secretary of Defense), John Kelly (Chief of Staff) and H.R. McMaster (National Security boss).

Barry Wood, RTHK’s US correspondent pointed out that “we have an unpredictable President surrounded by military men.” Not an optimistic combination for peaceful coexistence.

Whilst the strong personalities of the superpower leaders are unlikely to result in direct conflict, there will be plenty of proxy conflicts in failed states, warfare in cyberspace, and elimination of perceived enemies across borders. We are in a delicate and unusual phase of global relations where politics will determine the near future of the world’s economy.

The pursuit of world trade is now in the hands of perhaps just three men; International Women’s Day having not yet penetrated the P-suite. Global peace is likely to be maintained because the superpowers are hugely dependent on one another for trade to maintain prosperity to keep their constituencies happy. Prosperity, once tasted, becomes addictive.

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Trump will eventually get round to figuring out that the only statistically significant trade imbalance is with China - and he will attack it directly. The unstoppable force to open the Chinese economy will be met by the object of the Communist Party, whose instincts are to be unmovable.

Russia will play a bit part in the trade game by holding Germany’s ear, and energy supplies, and by a policy of making life uncomfortable for everybody else.

So the cold war version 2 begins. With your global rivals, you can’t live with them; and you can’t live without them. The three men are now settled in to play the Great Game.

Richard Harris is an investment manager, banker, writer and broadcaster – and financial expert witness at Port Shelter Investment Management.

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