India Assassinated a Sikh Emigrant on Canadian Soil

While giving a parliamentary testimony, Canada’s Prime Minister, Justin Trudeau, accused the Indian Government of assassinating a Sikh emigrant living in Canada who supported an Indian separatist group.

Intelligence from the Five Eyes has revealed that Trudeau’s claim was valid. This is significant because it means India is willing to “take care of business” outside its borders and could impact the entire Indian diaspora globally.

This will undoubtedly strain relationships between the Five Eyes and India moving forward, but there are still greater power politics at play. Although India’s stance will tarnish some relationships, it will still benefit from the anti-China actions taken by the West and the rest of the world.

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Transcript

Hey everybody. Peter Zeihan here coming to you from Colorado today. We’re going to talk about something that you guys have been writing in for weeks about what is up with the Indians and the Canadians yelling at one another over this assassination plot. For those of you who are unaware, the Canadian prime minister, Justin Trudeau, accused, who actually kind of mentioned it in passing in a parliamentary testimony that the Indian government had assassinated a Sikh emigre on Canadian soil.

The guy had Canadian citizenship. He had renounced his Indian citizenship. But the Indians have never liked this guy because he supports one of the separatist groups in India. It wasn’t a group that was part. I mean, this issue has basically been resolved in India’s favor. But he didn’t stop talking about it while he was abroad. And so as the accusation goes, the Indians wanted him dead and did it.

This has a number of implications. It took me so long just to kind of get to the bottom of it, because it involves intel that hasn’t been made public for the most part. But let’s say five things. Number one, looks like it was true. The intelligence didn’t come from Canada. It came from the United States and the Five Eyes system.

Five Eyes is a group of five Anglo countries Canada, Australia, New Zealand, the United Kingdom and the United States that share intelligence on almost everything. Anyway, the intelligence originated from the United States because that’s going to sound weird. Or maybe not. The United States has much better intelligence capabilities in Canada than the Canadian government does. So yeah. And then it was verified by the British government.

And the Brits have much better information gathering in India than the Canadians do. So all of the five eyes have basically kind of quietly said Canada was right on this one. That makes things a little bit complicated because, two, we have never seen the Indian government assassinate anyone outside of arm’s reach of their own borders. This is a fundamentally new capacity for them.

Now, assassinations are a little bit coming into vogue. The Russians have obviously picked up the pace for that considerably, even before the Ukraine war with radiation and poisoning and polonium being their preferred methods, although they’re not afraid of a gunshot to the head. And if you ever see somebody jumping out of a hospital window, that was only an assassination.

These kind of Russian culture are the Americans, of course, are are fans of it, too, as long as it’s done by a drone where we really frowned upon it when it’s done in person for some reason probably left over from the Cold War issues. And then, of course, the Brits are good at it anyway. Seeing this with India is significant because the Indian diaspora is arguably the largest on the planet, and if the Indian government starts patrolling it using extraterritorial and extralegal means that is going to rub a lot of people wrong in a lot of places, and eventually it’ll probably end up offing someone that actually matters to a government and not just because

it’s a citizen. So this is not yet a really big deal, but it has the potential to become a very big deal in the not too distant future. Number three, Canada is among the largest destinations for Indian students traveling abroad, and the Indian diaspora in Canada has become its fastest growing ethnic group. Now, obviously, the people who leave a country are not Brazil patriots.

So expect to see a lot more agitation within Canada as a result of this, as opposed to quieting down. If the Indian goal was to quell discussion of these topics, they probably just achieved the opposite because Canada, for all, for its faults, is a free country with a more or less free press, even if it is a little bit slanted, in my opinion.

And it’s very easy for anyone to say anything about anyone, anywhere. And because of freedom of information and the ability to send electrons around the world in a second, that will generate actually a lot more publicity in India as well. So this probably wasn’t the smartest play by New Delhi if their goal was to keep this very, very quiet.

Okay. More significantly, number four, relations with India. You know, by the five eyes putting their stamp of approval on the Canadian statement, that obviously raises the question about what relations between the Brits, the Australians and the Americans are going to be with the Indians. The Americans and the Australians are in the quad grouping with India, which is a kind of a security talk shop.

And the Brits obviously have ongoing relations and economic and otherwise with everyone who’s in the Commonwealth in their former colonies. So if you’ve got a major power, India starting to do things that are incredibly unsavory from the point of view of democratic norms, that is absolutely going to impact relations. The question is how much? The issue for the Americans and the Australians, of course, is China trying to try to try to China.

And honestly, I don’t think in this relationship we’re going to see too much of a change. Which brings us to the fifth issue, which is the nature of great power politics. When you have identified a country that you see as a large threat, a lot of the niceties that dominate the normal diplomatic and economic discourse fall by the wayside side in favor of hard security concerns.

And that means you are willing to partner with different sorts of countries and personalities that you normally wouldn’t even consider. So, for example, when Hitler was on the scene, we were best buds with Stalin, sent him billions in today’s terms, tens of billions of dollars of military aid in order to fight off the Nazis. Then when Hitler fell, we got into bed with Mao, who was the greatest mass murderer in history, in order to counter Stalin.

So the idea that we would partner with a mostly democratic but little bit unsavory India in order to counter what has become the most totalitarian government in the world. That’s an easy decision to make, but it does mean that the nature of the American and to a lesser degree British and Australian relationship with the Indians is going to change.

We never considered Stalin or Mao or French. They were allies against a very specific threat. And when that threat was neutralized, the relationship changed again. Now, there are a lot of decisions that Indians are going to have to make in the next several years as actions against the Chinese heat up. And the question will be whether or not they want a more productive relationship with these Western nations.

There’s a lot of water under that bridge. The answer may very well be no, but that means India will be doing Indian things with Indian policy for Indian interests. And to be perfectly honest, looking back on the last 70 years, that’s not much of a change. India unofficially sided with the Soviets in the Cold War, but they were very big on non-alignment for the most part carried it out.

What we’re seeing today is just kind of the slightly greater power equivalent of that same sort of political ideology. Now, sitting here in the United States, it’s easy for me to wag my finger and say that this is not the best thing for India or Indians, but I don’t get a vote in this. This is a decision to be made in New Delhi specifically, and to be perfectly blunt, in a world where lots and lots of countries are aligned against the Chinese and in my opinion, the Chinese are long for this world.

India is going to do very well regardless of what the relationship with the West happens to look like. This is their decision. Doesn’t mean we have to like it.

The BRICS Summit: Significant or Hoopla?

Have you ever seen a couple of 3-year-olds sitting on the playground talking gibberish and acting like they’re making life-changing decisions? Well, that’s what’s going on at the BRICS summit in South Africa this week.

BRICS comprises Brazil, Russia, India, China and South Africa, and if you’re struggling to find some overlap between those countries…you’re not alone. With limited economic ties and diverse interests, this group of countries struggles to connect on anything meaningful.

To complicate matters further, BRICS is looking to add some new members to their ranks: Iran, Saudi Arabia, the UAE, Egypt, Ethiopia and Argentina. I urge you to try and come up with a worse list of mid-tier countries to bring on if you want to expand your geopolitical influence.

The varying interests of the current and new members will likely halt any meaningful conversation. The practical significance of this summit and BRICS as a whole is – limited – to say the least. And if you were hoping this would shake up the global landscape, I’m sorry to burst your bubble.

Prefer to read the transcript? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

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Transcript

Hey everyone, Peter Zeihan here. Today we’re going to talk about the BRICS summit. It was originally intended to be a two parter, one during the summit and one after. But because programing got shot down yesterday. We’re combining this into one. So it seems to a little bit disappointed. That is why. And here we go. Hey, everybody. Peterson coming to you from the shore of Lake, where I have been visited by a whole bunch of goats.

They were very curious anyway. Today we’re going to talk about something that is in progress. And that’s the BRICS summit in South Africa. They’re trying to come up with a series of plans of what to do. They’re trying to consider whether they should let in new members. And odds are that this is just going to be a really stupid summit that’s going to amount to nothing.

But it’s still worth talking about because it’ll give you an idea of the architecture of the international system. And you never know. They might be able to pull something out of the fire. So the reason I have primarily been dismissive of the BRICS since the beginning is because it was never an organization. It was never a grouping that was founded by its members.

It was some finance guy who’s like, Look, we’ve got all this capital because the baby boomers haven’t retired yet. We should put it into bonds. And we’re some big bond markets. Oh, yeah, Brazil, Russia, India and China. That’s it. That’s all it was. And then taken to later, they led in South Africa in a in a fit of pique.

Nothing’s going on here. There’s never been any meaningful deal. They have formed a development bank, but now over 90% of the capital comes from China. And there are reasons for the BRICS to talk with China. It is a significant trading partner, but there’s no reason for them to speak with one another. Brazil, aside from exports to China, doesn’t trade with the rest of them at all.

Same with South Africa, same with Russia. India is a special case, and if there’s one country that doesn’t like China, that would be India. And, you know, every once in a while you’ll hear them talking about forming a global currency or a new alternative currency to challenge the dollar. And then they start talking about details and all falls apart.

So right now, India, China, South Africa and the BRICS own bank are on record saying that they’re not interested in a global currency. The only two countries are left are Russia, who thinks that everyone should use the ruble, of course, and Brazil. How can I qualify? Describe Brazilian foreign policies these days, especially on economic issues, kind of. Lodhi DA.

Not a lot of substance beneath rhetoric anyway. So the purpose of this summit is to bring in dozens of leaders from other countries and see if they can kind find something that they can all agree on. A history suggests the answer will be no and everyone is coming with their own list of grievances and desires. The Russians want everyone to sign up with them and boycott the West until the West agrees to give them their way on Ukraine.

Of course, Russia’s not included in that. Russia is still allowed to talk. The first is still how to to trade with whoever they want. The Chinese are hoping to get enough countries on board that they can then walk into Washington and demand trade concessions. They don’t care about all the other countries. They just want them for themselves. The Indians are there because they are more of a classic nine nonaligned power.

But as the Chinese become more rambunctious, the Indians have become more and more edging towards being in the American camp. So the normal rhetoric that you would expect to see out of the Indians just isn’t there. The South Africans who are hosting are pretending to be neutral in all this and say they don’t have an opinion. The Brazilians are very logical and that’s it.

We’re going to turn around here anyway. Why might this one spark? Why might this still matter? Well, if you look back to the Cold War period when we had the nonaligned movement, that’s what a lot of these countries are from. Not Russia, not China, but a lot of the ones who are now showing out, they saw themselves as not east, not west, not first or Second World, but is something else.

And they try to come together for a common thing called the new international economic order. And the idea was that the West should restructure their trade practices in order to benefit some of their former colonies. It didn’t amount to much at the time. Eventually it became known as the ACP group Africa, Caribbean Pacific, a former colonies of the Europeans who have a degree of preferential trade access when it comes to European markets.

But it never got the restructuring that they really wanted. The reason I’m even less optimistic this time around is because the interests of the groups that are showing up are far more diverse than anything that we had in the early post-colonial era back in the sixties and seventies. So if they do decide, if BRICS does decide to do something, it will probably be about expanding their membership.

And that would be one of the most effective ways that I can think of to make sure that BRICS never achieves anything at all because they don’t agree on any much right now. So this is going to be an unofficial two parter. We’re going to wait to see what comes out of the summit. And then I will let you know what I think about the new roster.

All right. That’s it. Bye. Okay, here’s part two. So BRICS did decide they wanted to expand to involve six members in the six countries they involved. Indicate to me that BRICS has no plans of doing anything useful in the future. Those countries in no particular order are Iran, Saudi Arabia, the United Arab Emirates, Egypt, Ethiopia and Argentina. And I mean, honestly, folks, this is hilarious.

Okay, so let’s start with what the naysayers are going to say about how this does matter and explain why it doesn’t. They’re saying that because of the addition of the three countries in the Persian Gulf region plus Egypt, that this grouping, BRICS, now produces about half to 60% of global oil. And that means the downfall of the dollar, the formation of an alternate currency, the end of the petrodollar, divestment, the United States.

And it’s the end of an era. And, you know, the short version is absolute bullshit. Number one, Saudi Arabia does sell a few loads to China in yuan, and Russia does sell a few loads in yuan or rupees in order to get around sanctions. But the Russian system is kind of by itself. And as Russia follows no one, as with the Saudi Arabians and the Emiratis, that might be a little different.

Well, you got to look at why they’re considering doing anything in non-US dollars. They’re looking for a security guarantor. They’re afraid that the United States is going to leave the region. And if it does, they’re on their own. And since they don’t like to be outside of air conditioning, national defense is something they’re not very good at. So they’re basically open to all potential takers when it comes to not oil sales for sales sake, but as a way of getting into your security planning.

The Saudis have gone with the U.S. dollar for the last several decades, not because it was the global currency, not because they’re part of a caucus group that is basically with the BRICS. And they’re not in any sort of meaningful organization in which the U.S. and Saudi Arabia members, they have a bilateral relationship that was based on security, and that was the reason why they use the U.S. dollar.

That’s the reason why they bought refineries on the U.S. Gulf Coast, because they saw the United States as the country that ultimately would bleed and die for them. And they’re looking for alternatives, not because they want an alternative, but because the U.S. is probably not interested in that role anymore. There are also right now trilateral negotiations going on among the Americans, the Saudis and the Israelis, in which the Saudis are seeking a Japan style security guarantee for themselves.

Now, they’re probably not going to get that. They’re probably going to get a lot of things that they’re after. But the bottom line is that for the Saudis, this has never been about the money. It’s never been about the currency. It’s about who’s going to take a bullet for them. And the Chinese simply lack the capacity to deploy at range in a way that the Saudis would be willing to accept and believe, especially since the primary foe that they’re worried about is none other than Iran, which is how it has been, added the BRICS as well.

That brings us kind of the second problem here. The the BRICS have realized that if you’re going to add a country like Iran, that is how should I say, has some firm opinions about security issues, for example, that it should be in charge of the Middle East. Well, then you have to add anyone else from that region at the same time.

Otherwise, you can never have any of them because the Iranians would do the vetoing. So that’s adding the UAE, Saudi and Iran at the same time. It guarantees that you can expand the organization in the future, but it also guarantees that on all significant issues, you now have members inside the organization that going to be in diametrically opposed positions forever.

So we already know that BRICS can’t have a meaningful energy policy because now you have a number of opposed powers Russia, Iran, Saudi Arabian, UAE, all in at the same time. What a shit show. Okay, next up, Argentina and Ethiopia. Ethiopia brings very little the table. It’s one of the ten poorest countries between per capita terms in the world.

It’s landlocked. It’s one of the handful of countries in the world that is not part of China’s one belt, one road, because even the Chinese like there’s no investment case there. So they added in in order to get a little bit of African flair into the organization. And that’s about it. Argentina is not poor. It has a entitlement complex in which it thinks that everyone should give it money and should never have to give any of the money back.

And the reason they applied for BRIC membership is they’re hoping to get Chinese money. It’s not that the Argentineans are anti-U.S. dollar in any meaningful way. It’s just they’re anti paying back their debts. And so they’re always looking for a new financial access point in order to leech off of it until it goes away as well. So honestly, you know, best of luck with those two because there definitely a drain on the organization and they really don’t bring much to the table.

Okay. Who am I looking to? Oh, yeah, Egypt. Egypt is basically a U.S. satellite state. The U.S. basically pays Egypt and Israel and Jordan, for that matter, to not go to war with one another. So thinking that there’s a security play here from bringing the Egyptians in. No. If anything, it’s a bit of a Trojan horse. It is a large developing country.

I would argue that the reason it got brought in is because of India, which still has a lingering love of the nonaligned movement in which Egypt was a reasonably potent player politically but economically. Strategically, I’m afraid not. All right. Is that everybody? Yeah, that’s everybody. When an organization expands, usually one of two things happens. Either one, you’ve got an overwhelmingly powerful single member that kind of decides how things go.

And that would be the United States and NATO’s, for example. Option number two is you expand it with each member, you bring in differing viewpoints, and eventually it paralyzes the organization from doing really much of anything. And the BRICS is definitely firmly in that category right now. This is really only going to amount to anything in the midterm now if one of two things happens.

Number one, the Chinese pay for everything, and that means subsidizing the existence of the Argentineans, as they believe they should be subsidized, which is a hefty price. And very, very poor countries like Ethiopia. The last time a major power tried to do this, it was the Soviet Union. It was the 1970s, and it broke the bank. So not very likely that the Chinese are going to pay for influence in places that they actually can’t control and don’t really bring them much if they did.

The second option is we could see this very, very rapidly expand to basically become the new nonaligned movement. Of course, it would be different this time because the Chinese very clearly have elements in mind and the Russians very clearly have some goals in mind. And it’s difficult to imagine a lot of the world’s middle and lesser powers following the lead of these two countries.

I mean, yes, a lot of the global south has not been interested in condemning the Russians for what’s going on in Ukraine. That doesn’t mean they want to follow them. And anyone who’s not blind realizes the Chinese has some very clear, very nationalist, very, almost hateful, domineering goals for the Chinese rise. And in that sort of environment, no one wants to be a pawn because all of a sudden the nonaligned movement is going to align with a global pull.

No. So where does that leave us? Well, I think if you look at what really went down at the summit, you get your answer. Chinese President Xi Jinping didn’t even show up to some of the opening ceremonies where he was expected to give a pole speeches. The Chinese don’t see this as a useful vehicle, except rhetorically, and that means you shouldn’t treat it as anything else.

All right. That’s it for me by.

Brain Drain and Capital Issues Plague India’s Tech Industry

Today’s video comes to you from the base of Saint Mary’s Glacier in Colorado.

With semiconductors top of mind for everyone, let’s dive into India’s tech industry and see if they can cement their place as a tech powerhouse. Despite government incentives for tech investment, big players like Foxconn are still pulling out of multi-billion dollar plans.

This isn’t a corruption or infrastructure problem. It’s just a case of brain drain – meaning the Indians in this talent pool pursue (more lucrative) opportunities outside of India once they’ve reached a certain skill level. Without a talent pool to choose from, everything else falls apart.

The second problem for the Indian tech space is capital. If you want to build a semiconductor fabrication plant, you better have some deep, deep pockets. Despite India’s size, its pockets just aren’t deep enough to be a world leader in tech.

Does that mean it’s all downhill for India? Absolutely not. The Indians have proven their dominance in several areas, and the collapse of the global order won’t impact them like most countries. India’s future is golden, and they will be a major world player…but their tech industry isn’t going to be why.

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First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

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TRANSCIPT

Hey everyone. Peter Zeihan here coming to you from the foot of the Saint Mary’s Glacier in Colorado. Today we’re talking about Indians. Semiconductors and tech in general. In the last week, well, maybe two weeks by the time you see this, Foxconn, the big semiconductor company, pulled out of a joint venture with Vedanta in the state of Gujarat, which is Modi’s home state, Modi being the prime minister of India. Modi has put up $10 billion in any government, I guess has put up $10 billion in order to attract investors into the tech space. And the pull out of Foxconn is kind of par for the course and for good reason. There wasn’t a corruption issue here. There wasn’t even an infrastructure issue. It’s a talent issue.

India is probably the country in the world that suffers the greatest volume of brain drain. No one ever doubts that Indians are actually good at I.T. and technological work in general. The question is whether it’s the Indians that are in India that are good at it, opportunities to move abroad into states that have higher incomes, more stability, less religious persecution, blah, blah, blah, blah, blah. All that stuff has really pulled the talent out of India, not just for the last several months or years, but decades. And Indians who are in that sector tend to move to Southeast Asia, where they can be in upper management, as opposed to staying in India, where they’re working for less money in order to have a more middling position. And when you’re doing tech infrastructure and tech industrial plant, that talent is everything. And Vedanta, the partner, is a typical Indian conglomerate and is broadly useless in training up these people because of the same problem. As soon as there’s an opportunity, as soon as you get them the skill set, they move. It’s something I can relate to. Personally, I am from Iowa, which arguably has the best educational system in the country and yet people like me tend to leave in droves as soon as opportunities arise for them elsewhere. So that’s kind of general problem one.

The second problem is just as insurmountable. The amount of capital that is required to make a semiconductor fab facility is absolutely massive, even if it is only the 28 to 40 nanometers that this facility was supposed to build. Now 20 to 40, that’s like a very low end tablet or a midrange internal combustion vehicle or a really, really, really, really fancy something for the Internet of Things. So what I kind of consider bread and butter chips, but nothing too crazy. That said, these facilities still run in the billions of dollars, oftentimes topping $10 billion if you want to do them at scale. That’s a lot of cash for a system like India. Now, India is a very large economy because there’s a lot of people and it’s a big place. But even the largest of the Indian conglomerates tend to get dwarfed in this space by the middle players in the tech space internationally, just because the level of capital is so difficult, the effort, the skill set, the labor force, the command of details that it takes to do something like this requires a massive organization and a metric shit ton of capital, and that is just not something that the Indians are very good at.

Now, does this mean that I think that the whole idea of shining India no more. Yes, but let me explain that. So before all you Hindu nationalist writing about it, what an evil person I am. I think India’s future is golden. India’s the first stop out of the Persian Gulf whenever you have an energy crisis. Companies like Reliance Industries have shown that India can dominate heavy and mid industry whatever its chemicals are agriculture or industrial materials. India is an excellent place to get stuff done. It’s got a multifaceted labor force that’s going to make it dominant in manufacturing, especially as the Chinese have more and more problems. They showed with COVID that they could develop their own vaccine. That works, unlike the Chinese one, which is other. Well, India has a very bright future. They’d never globalized under the American led order. So as globalization breaks down, India is going to broadly be fine. But India is going to do things for India by India in Indian ways, and that’s a negative as much as it is a positive. Capital flight will continue to be an issue. Technological acumen will continue to be a problem in the workforce. So India’s perfectly capable of ruling its neighborhood and doing very well for itself, and yet not being a technological power. These are two very different things.

So bet on India? Yes. Bet on Indian semiconductors? Probably not. Alright. That’s it. See you guys later.

Mr. Modi Goes to Washington

Prime Minister Modi is stateside and prepping for his address to Congress and state dinner. While a summit with Modi may have been inevitable (as he’s the leader of the most populous country and up-and-coming power), we need to look at India’s relationship with the rest of the world to see what might come of this meeting.

Given India’s fractious decision-making system – with most decisions occurring at the state and local levels – operating as a “country” is out of the question. India is only interested in things that impact India, so relationships and allies won’t work. The Soviets established ties back in the day, but that relationship is functionally over.

India has other factors that have inhibited its ability to form strategic relationships (or contributed to its ability to remain independent). Geographic barriers have helped keep others out, but also prevent India from projecting power. India is near the Persian Gulf, so they don’t need to worry about an energy crisis. They have decent demographics and plenty of time before any problems would arise. The collapse of China will send India into an industrial boom where they will be able to manage everything in-house.

All of these factors have enabled India to become a globally significant economy without being globally wired. Now the question remains…do I see anything meaningful coming out of this meeting? No, but a conversation about the future is better than nothing.

Prefer to read the transcript of the video? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
 
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

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TRANSCIPT

Hey everybody. Peter Zeihan here. Iit is the 21st of June. Well, here’s Loki. Today we’re talking about India. Look, he’s from India. Bengal. Anyway, Prime Minister Modi is in Washington right now. And by the time you see this on Thursday, he’ll be getting ready for his address to Congress as well as official state dinner.

There was some debate in Biden world about whether this is going to happen because in the past, Prime Minister Modi, especially before he was prime minister, hasn’t been a particularly nice guy. A little on the corrupt side, a lot of the popular side is willing to use religious divisions in order to further his political agenda, which is, you know, relatively distasteful from the American point of view and a lot of other points of view. Many would argue the Indian point of view anyway. He is still the leader of the most populous country in the world and an up and coming power.

So obviously there was going to be a summit. The question whether he would be welcomed as warmly as he has. A few things we need to talk about India, the Indians and the relationship with the wider world and the United States in particular. First and most obviously, the Biden administration has a few things that it wants from the Indian administration, that it would like more cooperation on things like the Ukraine war and sanctioning Russia.

They would like more cooperation on things like tech sanctions and in general, the diplomatic isolation of China. And the Biden administration is going to get none of that. The key thing to remember about India is that India looks out for India’s own best interests. And while every country does that to some degree, the big difference between India and everyone else is that India is not really a country.

It’s more like the Holy Roman Empire, where there is technically a central government, but almost all decisions that matter are made at the state and local level. And so while Modi is nominally the leader of this, and that does give him significant power and influence, he is only the most powerful of several dozen personalities across the Indian system who have decision making power.

And so the capacity of India to act like a state in the way that we think of that with France and China and Japan and the United States and the rest is very, very weak. Second, because of this internal, fractious, ever shifting coalition in competition, India, first and foremost concerned about how do things in the world impact India and makes it very, very difficult for the Indians to identify with any other power in terms of friendship or family or alliance or in sometimes even partnership.

So unless they see someone on the outside that is backing them and to the hilt for absolutely every little thing they care about, they’re going to call the relationship at best complicated and cold. It’s a very myopic way of looking at the world. But India has a very peculiar geography. It’s basically locked off from the rest of the world by a series of geographic and geopolitical barriers.

There are mountains and deserts and oceans and jungles and jungle, mountain and jungle deserts that general deserts. Sorry, desert mountains that separated them from everyone. And that’s not even all of it, because in a lot of these border territories, you’ve got hostile powers, whether it’s Pakistan, Bangladesh, Myanmar or, of course, China. So the ability of India to interact with the rest of the world has always been circumscribed.

And unless you are willing to back India on everything that involves their immediate neighborhood, without question, they’re going to view you with a bit of suspicion. This is one of the reasons why the Soviets during the Cold War were able to make India into a bit of a partner because they had no interests in Southeast Asia. So they just backed who ever happened to be the biggest power India, against everyone else.

And so the Indians developed a bit of a shine on all things Moscow, which has persisted long after the communist system has ended. What this means for the United States is India cannot ever be family. It can never be an ally, it can never be a friend, but it can be a partner from time to time. But because the Indians view everything through the very short sighted lens of national interest, they don’t have anyone who will watch their back.

The Russians have proven they’re not a reliable partner and the Indians are backing away from their defense cooperation with them, because the Indians now realize that the money that they’ve spent has been wasted, that the Russians can’t maintain their own output. They’re actually asking for some of the components back in order to support the war in Ukraine and at the high end works like the Brahmos cruise missile.

That’s just not going to happen at all. And so the Indians, you know, they’re not dumb. They’re short sighted. There’s a difference. And eventually you get to a certain point where they realize now they would only be putting good money after bad. And that means the Russian partnership, if that’s the right term, is now functionally over as well.

India is also not going to help the United States in boxing in the Chinese because they have a hard time seeing past their own nose. And anything that reeks of American leadership, which, you know, obviously would be in play here is something the Indians are going to reflexively recoil against. Now, does this mean that I think India is doomed?

No. Far from it. A couple of big things to keep in mind. Number one, geography works both ways. India has a hard time projecting out other powers, have a hard time projecting in, especially on land for naval powers like the United States and Japan. That’s less true. And that’s one of the reasons why this quad idea exists, because Japan, Australia, the United States and India can cooperate to a degree on naval issues that affect the Indian Ocean Basin because Japan, Australia, the United States don’t have strong interests in the Indian Ocean Basin, especially now that the war on terror has been closed down.

There was a period for the last 20 years where Indian American relations were not hostile but problematic because the United States had to be up to its hips in all things Pakistan in order to get military supplies to its operation in Afghanistan. Now that that’s over, the Indians and the Americans can commiserate about how much they dislike all things Pakistani, and that’s done wonders for their relationship.

Second, India is the first major country after you leave the Persian Gulf, which means that no matter what happens with global commerce or global energy, India is the first in line and it will never really have an energy crisis compared to what’s shaping up for the rest of the world. That’s amazing. Third, India’s demographic structure, while not perfect, is night and day different from the country they love to compare themselves to?

And that is China. New data out of China in just the last few weeks indicates the demographic profiles of Harvard. Worse than even I thought. The Chinese are now publicly admitting they have about half as many five year olds as ten year olds. So you carry that forward with some of the other problems that dividing reified with their own demographic strategy.

And it looks like whatever I was thinking was going to happen, which was already pretty atrocious, may have already happened. And we’re looking at a complete hollowing out. Now, India started to industrialize in a big way 35 years ago, and so the birth rate has dropped. But at current rates of birth rate decline, India will not find itself in a Chinese style situation for another 60 to 70 years, and that’s a long time for things to go right.

So India does have a demographic dividend to go along. A young adults that had fewer children in the past, that generally spells an opportunity for a 20 to a 30 year consumption driven growth opportunity. That’s not without risk. But on the mechanics of it, the next couple of decades look great. And then the fourth, as the Chinese face problems, a lot of the manufactured goods that the world has been importing from the Chinese system are going to go away.

Now, that means if countries still want stuff, they to have to build out their own networks to build that stuff themselves. If that applies to India just as much as everywhere else. So we should expect to see a 2 to 3 decade industrial boom in the Indian space as well. Now it will be different from what’s happening in Mexico because remember India has no allies, no friends and very few partners, and those partners are erratic.

So the sort of manufacturing synergies that Canada, the United States and Mexico and to a lesser degree Central American Columbia can generate. India has to do it all itself. And that means it’ll be more expensive, more time consuming and slower to happen and use more labor, be less productive, less efficient at the end of the day, have lower quality product.

But in a fractured world, India will have something that a lot of countries won’t. It’ll still have stuff. And in that sort of world, India looks good. They are perfectly capable, the Indians, of running an economy that is globally significant without being one that is globally wired. So for Biden, do I think anything of substance is going to come out of this summit?

No. The geography of India, the politics of India, the ideology in India probably precludes that. But that doesn’t mean that the relationship has to be hostile. And if there’s going to be a major power in a different hemisphere, in a strategically interesting area, you should at least have a conversation. And so think of that as what’s going on with the Biden administration right now.

Not a plan for the future, a conversation about it. We could do a lot worse. All right. That’s it. Take care.

Demographics Part 9: The Advanced Developing World

The advanced developing world is about to have its moment. We’re talking about India, Turkey, Indonesia, Vietnam, and Brazil. These countries were a little late to the global scene, but now it’s their time to shine, hopefully…

The path to globalization is well-traveled, but that doesn’t mean its obstacle-free. These countries will have to work hard to balance their shifting demographics with changes to their economic structures and movement along the value-add chain.

For a country like Brazil, their current trajectory could very likely send them into a crippling demographic situation with no way to pull themselves out. If a country like Turkey continues to move up the value-add chain steadily, I could see them flourishing in the coming years.

These countries are not facing a terminal demographic situation quite yet, but if history has taught us anything…now is the time for them to reconcile their declining demographics and prepare for what comes next.

Prefer to read the transcript of the video? Click here

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First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
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TRANSCIPT

Hey Everybody. Peter Zeihan coming to you from Colorado. I am in training for my upcoming New Zealand trip and so I wanted to record a couple of videos that would last a little bit longer. So this is the most recent installment in our demographic series. And today we’re going to talk about the advanced developing world, a group of countries that includes India, Turkey, Indonesia, to a lesser degree Vietnam, certainly Brazil.

These countries have a lot of things in common, not just in terms of their demographic structure, but their economic history. So until World War Two, these were all either colonies or kind of isolated systems. And they had that traditional, pre developed world pyramidal structure that was very high consumption, high inflationary and relatively low value added. But even in the early decades of the post-World War Two era, they didn’t really join into the Bretton Woods free trade system, even though some of them, several of them were signatories to the pact. They kept their economies to themselves for nationalistic reasons. And to be perfectly blunt, there was a fair amount of the advanced world, most notably Europe, where even though global trade was available, they really didn’t globalized their supply chains. They were export products, but they tried to not become dependent upon anybody else in terms of the production cycle. Well, you play that forward until 1992. And what changed in 1992 is, of course, the Cold War ended. And that’s meant that a lot of the strictures that had made it difficult to do things went away. And these countries came in from the cold from a little bit a second in 1992, the Europeans signed the Treaty of Mashhad, which did away with a lot of the internal tariff and non-tariff barriers that existed within the European space. And that meant that the Europeans started to integrate and especially German supply chains started to link to the rest of Europe over the course of the next 20 years. That was extended first as economic links and later as full EU membership to all of the states of Central Europe, from Estonia down to Bulgaria, with Poland being the most important one. And that meant that the European space, or if you want to be honest, the German economy became suddenly this global powerhouse and started exporting products that were a lot more value added from a lot more product sectors. But most importantly, of course, 1979 was the year that the Chinese started to tiptoe into the international system and then really join in in the 1990s and 2000s, which meant that the Chinese were ravenous for raw commodities and would pay pretty much anything to get whatever they needed.

This all benefited the advanced countries of the developed world because they could get certain products from the Germans and the Chinese that they could make at home, and then they could work on either raw materials or manufacturing to fill in the niches that the bigger economies didn’t provide. So for most of this class of country, 1990 really was the break point where they started to urbanize and industrialize. It took the combination of not just the global trading system, but also a change in the way that other major economies viewed economics. In the case of Mexico. 1992 is when after was adopted and of course, the early 1990s when the WTO came into existence.

So what this means is that these countries started this rapid process not in the forties or fifties, like, say, the Koreans or the Japanese or the Europeans, but not until the 1990s. But by that point, the process of developing and industrializing and urbanizing was kind of old hat for a lot of the world. So these countries were able to proceed down that path a lot faster than the countries that have come before. So for the Brits, it took seven centuries. For the Germans, closer to five. For the Americans…America’s a special case, let’s leave them out. For the Spanish, it really only took 2 to 3. These countries have done it in really one, one and a half to two. And as a result, starting in the 1990s, their birthrates plummeted, in most cases dropping by half to two thirds. So if you look at the population structure of their demographics, it’s a pure a pyramid for people who are above about age 35 and then it goes straight down in a column. Now, this is hardly a disaster. By having fewer children, more money can be focused on education, on infrastructure, general business investment. And so all of these countries have been moving bit by bit up the value added scale. We’ll look at Mexico from a value add point of view, comparing the value of the inputs versus the value of the exports. It’s probably the most high value added economy in the world. So, you know, no slouches in any of these categories.

But this has some consequences because if this continues, these countries are going to age at a much faster rate than the countries that preceded them. So, you know, we’re talking about these countries reaching a mass impact in really under 20 years. And in the case of the United States, as a point of comparison, the U.S. is going to be a younger country, demographically speaking, on average, than Brazil in the early 2040s in Mexico and Indonesia are going to pass by us in the early 2050s and probably even India by 2060.

Now there’s a lot of history to be written between here and there, but these countries all have a demographic moment and if they take advantage of it, to become developed by moving up the value added chain very, very rapidly, kind of like Mexico is, then by the time they get to these points, they will be developed enough to deal with those sort of demographic consequences. But if they become stuck in the middle, which is definitely what seems to be happening with Brazil, they’re going to have some real problems because they’ll have gotten old without becoming developed.

The case of Brazil is a special one and it’s almost entirely because of China. The Chinese came in under President Lula, his first term, and they signed a number of deals to build joint ventures for producing products in Brazil. But the Chinese basically lied and stole all the technology from all the Brazilian firms and then took it back home, produces in mass and basically drove all the Brazilian companies out of the global market. So the Brazilian industry now only basically services the Brazilian system. Indonesia has not fallen prey to that because they didn’t have the technological aptitude in the first place. They’re trying to move up the value added scale, getting out of raw commodities into processing and ultimately into things like battery assembly, which is overall a pretty good plan, inconvenient for the rest of the world, who is trying to go green quickly, but definitely in Indonesia’s best interests. Mexico is definitely the furthest along overall and moving up the value added scale. And in terms of labor productivity, I’d argue they’re above Canada already. Who am I leaving out? Turkey? The Europeans have integrated with Turkey to kind of be the Mexico for Europe. And Turkey began with a much more sophisticated labor force and infrastructure than the Mexicans had in the 1990s. They haven’t moved as fast, but you have a much deeper penetration of these technologies in these skills throughout the Turkish system than in any other countries in this class. So if the Europeans were to vanish tomorrow, the Turks would obviously feel it. But they definitely remain the most powerful country in the neighborhood, and their demographics are young enough and their neighbors are even younger that I could see a Turkish manufacturing system really taking off. Obviously, this isn’t Germany would be the same quality, quality of product, but would still be a pretty good result anyway.

Bottom line of all of this is that these countries all had a moment, the historical moment that is approximately as long as the one we’ve just completed with the hyper globalization of the post-World War Two era. But it is still only a moment, and they all need to really buckle up and get down to business if they want to do well in what comes next.

All right. That’s it for me today. See you guys next time.

Is India the Next China?

When I get the question – “Is India the next China?” – to the surprise of many, I respond with a resounding NO! And the Indians should be extremely happy about that. When most people look at India, they see a ton of people and cheap labor. But once you dive a little deeper, the stark differences between India and China start to appear.

Thanks to globalization, China became the manufacturing powerhouse it is today; India missed the globalization train. So India will probably be just fine when the rug gets pulled out from under the global system.

China’s economy owes much of its success to hyper-financialization due to the government flooding projects with loans and capital. Great for the appearance of economic growth, but wildly inefficient and unproductive. In India, capital availability is low, so the projects that get funding are actually productive.

And finally, my favorite topic, demographics. China is a mess; just go watch my videos on that. India is just now industrializing, so their demography has shifted into the chimney we often see (having the same amount of people in their 40s, 30s, 20s and so on). However, this has happened much later and is proceeding much slower than their peers.

On top of all that, India is geographically blessed with access to food and energy right around the corner. Don’t get me wrong, India has its own set of issues, but they are all on a magnitude lower than what China’s got going on.

Prefer to read the transcript of the video? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
 
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

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TRANSCIPT

Hey everybody. Peter Zeihan here coming to you from the great golf course wilds of Ojai, California. Today, I wanted to do something that a lot of folks have been asking for a while and talk about India. So this is kind of like half in the demographic series, half on its own.

Lots of folks are always wondering if India is going to be the next China because it’s a big country. It has more people now. It has a faster growth rate. And, you know, it’s a legitimate question, but I have to give it a resounding no. And that is something the Indians should be very happy about. Chinese success to this point has been based on three factors. First of all, the strategic largesse of the United States in creating the globalized system, to allow the import and the export of everything on a global basis without having to first secure territory or sea lanes militarily. This came about as a result of not just the American globalization push after the Second World War, but when Nixon went to see Mao in China and to engineer the Soviet Sino split, which ultimately made China an ally of the United States in the later years of the Cold War. That is what created the manufacturing powerhouse that we know as China today.

Now, the United States have lost interest in that, and the United States sees China as a rival. So the continued existence of the Chinese economic model is dependent upon the ongoing strategic largesse of the United States, which is a very bad plan. And we’re seeing the United States hack out bit after bit after bit. It’s already happened in agriculture and energy, in manufacturing, especially in semiconductors. And the United States has the ability to kill any of this overnight if it should choose to. So the economic future of China is, one, without exports and imports and market access. And I don’t know how they can square that circle.

In the case of India. India never joined the system. India was pro-Soviet during the Cold War, and even when the Soviet system went away, the Indians kind of reflexively remained a degree pro-Russian in the years since. So their system is never internationalized. Now that means they missed out on the big growth push that the Chinese had in the eighties, 19, 20 and 2010s. And that’s why the Indian economy is so much smaller. But it also means that when the rug gets pulled out, India really doesn’t suffer all that much.

The second big piece of China’s success is hyper financialization. The idea that the state confiscates the bank deposits and the savings of the population and just floods would be projects without money, making sure that everybody has a bottomless supply of 0% loans so that everyone can have a job. Now you will get economic growth with this, but it will be wildly inefficient and in many cases flat out nonproductive. The closest comparison we have in the United States is Enron and subprime. We know how that went. Now, imagine doing that for every single economic subsector throughout the entire economic structure, which means when it goes down. And it will go down. You don’t just have a financial and a housing crisis. You have an everything crisis. And the economic sector that has been most exposed, that is most dependent to this capital is agriculture. So you can toss a famine on top of that. This isn’t a problem in India.

Now, the Indians system is capital poor, no navigable waterways of note, very high population per person capital availability in India is among the lowest in the world, lower than most of sub-Saharan Africa. But that means that the Indians actually treat capital like money. It’s an economic good as it should be, as opposed to a political good as it is in China, which can be thrown at whatever you want. So again, you don’t get the growth, but you also don’t get the instability.

The third big factor is demographics. Now, we’ve already talked about China at length in terms of just the hollowing out of the entire system. This simply hasn’t happened in India at all. Now, India has, like everybody else, started to industrialize. And so India has, like everyone else, slowly transition to kind of that chimney demography where they have as many people in their forties as the thirties of their twenties. Those are teens. But the process started a lot later than it did in China, and it’s proceeding a lot slower. And so while India is in the midst of rapid aging, it’s from a very late start, at a relatively slow speed compared to a lot of other countries in their peer group, much less the Chinese, which really are in a category all their own. Which means that India today has plenty of people under age 40 to do consuming and even still have kids. If they can find a way to reverse some of these trends. And that means in 10, 20, 30, 40 years, India is going to have a lot of people aged 40 to 65 who are going to be capital rich and high value add and in a system with one and a half billion people, even if that’s only 10% of the population, and it’s more, that’s still a whole lot going on.

Now, in the worst case scenario, where birthrates continue to shrink and the Indian population continues to age, we are still talking about it still being the world’s largest population for at least another half a century. And they won’t be in a European style crunch for their demographic within 40 years. So even if they do everything wrong, even if everything turns against them, the future of India looks pretty good. And they’ve got one other thing going for them that the Chinese don’t. They’re a lot closer to the things that they need. Australia is a much more friendly nation to the Indians than it is to China, and so there’s always going to be some extra food supply or mineral supply that’s available. And India, the subcontinent is the first stop out of the Persian Gulf.

So India is one of the last countries in the world that you should expect to ever have an energy crisis. Whereas China, is the last country on a very, very long easy to disrupt chain. So all of the normal issues that we think about when we think of India inefficiency, women’s rights issues, what that means for their economic growth, the fact that Pakistan is right there. Now, these are all relevant along with corruption. These are things we should worry about. But they’re an order of magnitude less than the problems that are plaguing China now, and they’re all survivable.

There are solutions that the Indians can come up, and even if they can’t, they can cope with these as they continue to grow. Whereas China, we are very close to the end. Alright. That’s it for me. See you guys next time.

Where in the World: Fagradalsfjall, and Breakthrough Tech

Some questions I’ve been asked about as of late have been on the topic of what technologies do I see that could move the needle on some of the more… dire forecasts that I’ve made.

Some of the most impactful are going to be in the field of agriculture. The industrial revolution sparked massive changes in how humans grow and distribute food. Chemical fertilizers, pesticides, tractors, combines, storage, refrigeration, global transport—the things that give us tomatoes in winter (no matter the quality) are also what has allowed fewer people to feed a global population that has ballooned over the last century.

But what industrialization has brought, deglobalization can take away. Concentration of production of farm equipment, fertilizers, pesticides, and capital means that in the absence of the safe and secure transport modes of The Order most of the world’s current mega producers (Brazil, China, India) face precipitous declines in caloric output.

One answer to avoiding a catastrophic decline in food output? Technology. The same science behind increasingly powerful facial recognition has promising potential utility in conjunction with automated field equipment, more efficiently administering water, fertilizers, pesticides, and herbicides to crops in the field. The attentiveness and nurturing care of pre-industrial gardening, but on a much more massive scale.

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Coronavirus: The Developing World Guide

As governments in Washington, DC and London and Paris took their time to push their respective populations to shelter in place, the novel coronavirus did what it does best: spread quickly and efficiently through dense populations, the sort of dense communities that define the US Atlantic coast and most of Northwestern Europe.

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