Political risk is not politics; it’s political science. In conversation with Dr. Ian Bremmer

By Aryadita Balakrishnan

Originally Published by: Tufts PostScript

Dr. Ian Bremmer is President and founder of the Eurasia Group–a leading global political risk research and consulting firm– he is a prominent public intellectual and author whose work has appeared in a variety of top publications. He is currently a foreign affairs columnist and editor-at-large for Time magazine, as well as a global research professor at New York University. His latest book, Superpower: Three Choices for America’s Role in the World, was released in May 2015. I interviewed Dr. Bremmer on April 5th, 2015.

Aryadita: Why are we seeing a decline in Pax Americana–a state of relative international peace overseen by the United States–in the past few years? Do you think that this is a trend that the next President might be able to reverse?

Dr. Bremmer: There are several reasons for it. Some are domestic and some are international. To summarize, let me go around. First, in the United States itself, you have a President that wasn’t elected to do foreign policy. He didn’t have much experience with it and has a particularly weak second term team including not just the Secretary of State and Secretary of Defense, but also Secretary of Treasury which is a very important national security device. [This team is] not very cohesive. So, I do think that some of this is Obama, which is implied by your asking whether or not the next President is going to make a huge difference. But I also think a lot of it is structural, given how partisan Congress is, how difficult it is to move the needle on foreign policy and given the willingness of Congress to obstruct things like the Iran nuclear deal. The reality of the energy revolution is that it makes what’s happening in major energy producers around the world a little less relevant for the United States and the hangover from the wars in Iraq and Afghanistan makes Americans want to do less as well.

The fact that 50% of Americans have the same net worth that they had 40 years ago means that they don’t think they benefit from US-led globalization, so that is a factor as well. In addition to the United States side, you have the international-side; it becomes harder to work with allies, and the Europeans are incredibly distracted and very incoherent. The Germans are leading Europe and the Germans are, of course, much more unilateral in orientation and more commercial in orientation in foreign policy outside of Europe than the British would be or the French. The fact is that a rising China is less willing to cooperate with the United States or go along with the United States particularly on big economic issues internationally; they are more capable of saying “no.” Of course, the Russians are in decline but actively subverting American interests. The final point, and I talked about this a little bit at the beginning of my speech is that so many of the tools of power internationally are themselves more unilateral as they are being expressed by the United States in the 21st century — surveillance as opposed to traditional military capabilities, drone strikes, and what I call weaponization of finance — the using of markets and market access as both a carrot and stick. So, put all of these factors together and there are a lot of structural reasons why we are seeing US foreign policy in effective decline. Now, do you really believe that the President matters? I think that in this environment where Americanization is deteriorating due to structural factors, the American President does not have the ability to set all of that right–whether it requires averting four failed states and active wars in the Middle East, turning back the record numbers of refugees, or finding a global strategic cooperation with the Chinese in their own economic architecture.

“There are a lot of structural reasons why we are seeing US foreign policy in effective decline. Now, do you really believe that the President matters? I think that in this environment where Americanization is deteriorating due to structural factors, the American President does not have the ability to set all of that right”

Aryadita: I have two questions to build on your answer. The first one is with regard to the next President. Do you think we are going to see a sort of a trend towards “Splendid Isolation” once again with Presidents moving away from foreign policy and trying to focus on the domestic realm as much as possible?

Dr. Bremmer: A couple of things in this regard. First of all it’s very clear that the United States lives in a globalized world and the ability of even relatively small actors to disrupt the lives of Americans, and I am not just talking about terrorism but also about cyber attacks in particular, means that you have to be much more exercised with things that happen in lots of different quarters of the world. Of course, the mutual economic interdependence and the mutually assured economic destruction of the United States and China in terms of their holding our paper, in terms of the importance of Chinese exports, the American economy imports of Chinese labor which is decreasing over time but nonetheless really matters — that means you can’t really have a coherent conversation about isolationism. But what the Americans might do is become less interventionist and much more unilateral. I think this is happening, I think that the willingness of the Americans to go to war for other people on issues that aren’t particularly important for the average American has decreased. The United States is much more intrusive in terms of drones than we ever have been before — but these are things that obscure violence and make it seem as if the Americans themselves aren’t at war, though if you are at the receiving end it feels a lot like war. And I think that the United States’ willingness to use sanctions against both enemies and allies is also important.

I don’t see a trend towards actual isolationism, but I do see a movement to question the utility of alliances: how committed does the US want to be to foreign policy interests that are being supported by other countries that are not necessarily aligned with the United States? I think that you see this absolutely in terms of the deterioration of the US-Israel relationship which was broader than just Obama vs. Netanyahu; you see it with the US-Saudi relationship after the US has taken its special forces out of Yemen and the Saudis are now leading this international coalition to fight a war there; you see it with the British and their decision to join the Asian Infrastructure Investment Bank; you see it less in Japan and Asia because of the threat that China is perceived to be to those countries.

“These[drones] are things that obscure violence and make it seem as if the Americans themselves aren’t at war, though if you are at the receiving end it feels a lot like war.”

Aryadita: You also mentioned the weaponization of finance and how in the 21st century this is a replacement for boots on the ground. How effective do you think this strategy has been so far — specifically with non-state actors?

Dr. Bremmer: I think it has been effective. There is no question that the United States has gotten a bunch of countries to come on board with US sanctions precisely because the power of the American dollar, of the American clearing houses and of the American financial architecture is enormous. No other country is close to [this level of financial power]. But I think that there are two important things to consider. First of all, it does have a backlash. The willingness of other countries to build alternatives over time because they don’t want to support US weaponization of finance, is growing. In addition, the United States’ ability to actually impose these consequences against large enemies or ‘frenemies’ of the US is limited.

For example, the United States is pushing a policy that is focused on the weaponization of finance against the Russians and that has really hurt the oligarchs. It has caused economic pain in a direct way against people that are around Putin. Putin’s response has been nothing but escalation because he sees it as regime change and he is powerful enough to say “no.” If Mr. Putin were the Iranian President, his response would be different. And I actually, think that in the case of Iran, the United States was able to leverage its economic strength, wield it as a club and force other countries to get along. It took a long time, but if we get a deal now–and there is a good chance we will–it will be because of an effective strategy of US weaponization of finance. But Russia was too big for this strategy to be effective. The Russian answer has been escalation and closer relations with China and neither of those two things are in America’s interests.

“If Mr. Putin were the Iranian President, his response would be different.”

Aryadita: Moving on to the bear in the room: do you think there is an order in Putin’s chaos?

Dr. Bremmer: Well, I understand why Putin decided to annex Crimea and take a hardline against Ukraine. I think that decision was very widely supported within Russia itself and it reflected a feeling both of Putin and of the Russian people that the Russians had been treated badly and that the West–particularly the United States–had summarily dismissed their interests. It started a long time ago, with things like American energy policy in the Caspian region, NATO enlargement, missile defense and Ukraine was simply the last straw. The Russian people were very happy to see Putin stand up and say, “we are not going to take this, we are not going to let you subvert the single most important foreign policy interest we have and lie to us while you are doing it.” The problem was, Putin miscalculated — he didn’t think that oil prices were going to fall 50% while he was doing that and that of course put him in a much more difficult economic position while all of this was going on. It made it harder for him to resist the depredations of western sanctions without taking an economic hit. And he has also had some problems within the Kremlin itself. The murder of Nemtsov clearly was not ordered by Putin and he cannot afford for something like that happen without him knowing about it.

“The Russian people were very happy to see Putin stand up and say, “we are not going to take this, we are not going to let you subvert the single most important foreign policy interest we have and lie to us while you are doing it.”

Aryadita: How do you think Putin’s personality and that of other Eastern leaders like Xi Jinping and Modi–who are all strong–match up to the personalities of major leaders in the Western world?

Dr. Bremmer: Look, I think that in emerging markets if you don’t have active reform, you know you are going to have a lot more economic challenges. Wherein the developed world, unless you are in crisis, that reality is much less true since those countries are consolidated. So in countries within Europe and the United States there are a lot of people saying, “we don’t care who we elect as long as the person doesn’t actively screw anything up” and that philosophy will continue lead to a lot of investment. So, that is ceteris paribus — you do actually need stronger leaders to actively reform, to change the nature of the governance system, which is much less true in developed states. Europe today is an exception precisely because they are actually facing a serious crisis and they do need structural reform. But it’s hard to compare Putin to Modi or to Xi Jinping. They are very different kind of leaders who face very different structures. They are all strong leaders, but Putin’s strong leadership has in many ways, been at the expense of the long-term sustainability and growth of the Russian economy. He has not made economic reforms that would diversify the Russian economy; the country is still very much a petro-state and it is a very kleptocratic one. That is a very serious problem since anti-corruption has never been effective in Russia. In China, Xi Jinping is engaged in serious anti-corruption. He is trying to respond to some of the things that are necessary for the long-term so that China can develop economically. So, I would say Putin is working to consolidate his power and show the world that Russia still matters. I think China is not particularly insecure and the leadership that is being shown by Xi Jinping is much more sustainable long term. Where India has been underperforming for a very long time, Modi really reflects what could be a sea change in the way that country functions.

“In countries within Europe and the United States there are a lot of people saying, “we don’t care who we elect as long as the person doesn’t actively screw anything up” and that philosophy will continue”

Aryadita: Looking back at what you said about Europe and how they need a strong leader — doesn’t that translate to populism in certain respects? How do you think populism functions within the European Union as a larger body? Since World War II, we have seen a cautious and conscious avoidance of populism in Europe, but do you think that aversion will be sacrificed once again for economic promises?

Dr. Bremmer: Well, it is being sacrificed, whether it is the election of Syriza in Greece or the rise of Podemos in Spain or the pushback against austerity measures in Portugal. Across the board, there is a significant level of economic damage that has been done in Europe. The European middle-classes have hollowed out and many young people don’t have opportunities. There is a reason why economist Thomas Piketty (author of the best-selling book Capital surfaced in France and not in the United States. That’s because the problems he delineates are much more significant in Europe which doesn’t currently have growth or productivity. It does have leadership in terms of Germany. German leadership works well for the Germans, but it has much less legitimacy among all of these people that feel like their interests have been run over so that German banks can be paid. I am not suggesting that this narrative is absolutely true, but there is enough truth in it that it becomes useful for populists to run with it.

Aryadita: England is coming up to elections very soon and David Cameron has promised a referendum on their position in the EU. How do you think it is going to affect the European Union if David Cameron gets re-elected and the tide continues to turn against the EU in England?

Dr. Bremmer: It will be a few more years of complete uncertainty as to what the nature of the European Union is; it will obviously be an enormous debate in Britain and that will have massive implications for every other country. The fact that they want a referendum means that other countries will say they want a referendum. Now, you have Madam Le Pen of the Front National in France saying that if she wins the Presidency, she wants a referendum on a French exit immediately. She is not going to win but it is quite possible that Sarkozy and others in the center-right in France will feel like they need to make noises about a referendum as well. Why are they saying that? It is hard to argue against the right to vote for something and this is becoming politically very salient. So, the dangers are there.

Aryadita: Do you think this instability in the EU along with its dependency on Russian gas will further embolden Putin to take the kinds of bold foreign policy stances that he has taken thus far?

Dr. Bremmer: I think that Putin has had some success in creating a wedge between the Americans and the Europeans. The French and the Germans are now saying that their military intelligence has revealed fewer Russian troops on the ground in Ukraine than NATO had originally claimed. That’s interesting.

The Greeks are very pro-Russia, there are a lot of desires from many governments across Europe to say that these sanctions are not the way forward, they are not going to work. The Russians are not going to give in, they are not going to listen to the Europeans or the Americans on Ukraine. But there is a possibility that if they maintain something that looks like a status quo for the coming months, it will be tougher for the Europeans to maintain sanctions along with the Americans.

The question is, does Ukraine fall apart? There are lots of ways that violence can expand there, only some of that has to do with the Russians. For instance, will the Americans send weapons? I don’t think so, but if they do, that decision will make things interesting.

“Putin has had some success in creating a wedge between the Americans and the Europeans.”

Aryadita: Moving to Iran: do you think that the Iranian regime has done more damage than their hypothetical nuclear weapons could ever inflict, by exposing the differences and tensions in the relationship between the United States and Israel?

Dr. Bremmer: No. I think they have done more damage through cyber. A nuclear deal focuses on a danger that has existed over the past decades. Going forward, Iran’s cyber capabilities, as was demonstrated against Saudi-Aramco a few years ago, are going to be the most impactful in terms of how Iran might pose a security threat to other countries, both in the region and more broadly. This is something that no one is really negotiating or talking about right now.

We know affirmatively that we don’t want Iran to develop nukes. But we didn’t want Pakistan or North Korea to develop nukes either, and both countries ultimately did.

The US-Israel relationship is somewhat strained right now. But this strain is not entirely due to the Iran nuclear deal. The Secretary of State spent 18 months doing nothing but prioritizing the Israeli-Palestinian negotiations and got absolutely nowhere. Meanwhile, Vice President Biden made a trip to Israel and more settlements were announced while he was there. The relationship between Israel and the United States is becoming more divisive and less aligned. There is no real support for a two-state solution on the ground right now between Israel and Palestine. The Palestinians have been walled off and they don’t have a military threat that is effective against Israel anymore. So the security issue is not that salient. The Israeli left is not talking about peace so much as they are talking about progressive economic policies — that is how they are getting support.

I think those negotiations clearly drove the US and Israel farther apart. And yes, the Iranian nuclear deal is driving them farther apart. America’s reduced interest in the Middle East, as the region continues to look like just a breeding ground for incredible violence and hostility and poor governance, is a factor in this division as well. A lot of Americans are just not interested in just getting sucked in. Israel is not the top threat in the region. People used to think that if you fixed Israel-Palestine you fixed everything. Nobody says that any more, you don’t fix ISIS by fixing Israel and Palestine; you don’t fix anything except for Israel and Palestine.

“People used to think that if you fixed Israel-Palestine you fixed everything. Nobody says that any more, you don’t fix ISIS by fixing Israel and Palestine; you don’t fix anything except for Israel and Palestine.”

Aryadita: With the rise of ISIS and the sectarian divisions we are seeing in the Middle East, the whole concept of the nation-state in that region is becoming very blurry. Who is an American ally in that area? There are no defined borders or nation states. Which country or what groups are American allies?

Dr. Bremmer: In the Middle East, Israel is still the best ally of the United States. Saudi Arabia is number two and Egypt is number three. But all three are more strained than they used to be. The importance of Israel is that it is still a democracy and remains a transparently run government within a region that has a lot less of that than it once had. But Kurds–who don’t have an official state but are coming close to having a nominal one–are also an increasingly vital ally.

Aryadita: Moving to South America, do you think Dilma Roussef’s days as President of Brazil are numbered?

Dr. Bremmer: Yes. They are numbered but everybody’s days are numbered. They are talking of impeachment and a couple of million people were on the streets a couple of weekends ago, but I don’t think that she is going to be forced out. What will likely happen is in order for her to deal with the corruption in the Petrobras scandal–which is quite big–she’ll need to draw a lot of key supporters from Lula’s camp.

Aryadita: In reference to your work in political risk analysis, we see a new crisis hit the front pages every day. What do you think the next big one is to watch out for?

Dr. Bremmer: I think the likelihood that this Russia thing is going to get worse is pretty high. I don’t see a deal on Ukraine, I think Putin is under a lot of pressure and he is going to be under more pressure internationally and some domestically even though there is no official opposition really. His willingness and capability of causing more trouble in other places — so a military action between Russian planes and NATO or a commercial airliner in Europe — that would be a big one, cyber attacks against an American financial institution. Those kinds of thing could be potentially serious.

Aryadita: After the Second World War, we got the long telegram from George Kennan in Moscow which outlined America’s policy of Containment. Do you think America is waiting for a telegram like that to give them a new direction in terms of foreign policy in the 21st century?

Dr. Bremmer: Well, I certainly hope that my book can be a piece of that. That is what I am writing about; the fact that there is this existential crisis in the American’s face where America is not “at war” but the world is increasingly at war and we don’t know what we want our role to be. We know that we are still the world’s only superpower, but we don’t know how we want to respond to it. We don’t know — are our values important internationally any more? Do we want to be the world’s policeman? Do we want to be the world’s investigator? How important are our allies? Do we have special relationships? I think that there really isn’t an answer to that right now, and there hasn’t been for the last 25 years. But the world was less dangerous after the Cold War and it has become increasingly dangerous now that we are entering this Ground Zero world where we have a power vacuum. So you are going to have a lot of regional hegemons developing that think they have got the answers for their backyards and some of those answers are antithetical to what the Americans would want.

“There is this existential crisis in the American’s face where America is not “at war” but the world is increasingly at war and we don’t know what we want our role to be”

Aryadita: My last and final question relates to something much closer to Tufts. You know we have a large and vibrant community of undergraduates studying International Relations and International Economics — and all of them want to be in something similar to what you are working on right now. What advice do you have for them? Do you think that political risk is a field on the rise?

Dr. Bremmer: Yes — it definitely is. It is a field that is very much evidenced by the great work that Fletcher is doing in developing a program and taking it seriously and this was not being done when I started my company back in 1998. I think it has become a lot more important and I am delighted to see it. And I think that what students need to do is to first recognize that if you want to really understand political risk, you have to understand not just political science but you also have to really understand the private sector. So, you need to know how markets operate, you need to know how industry operates and how politics affects it. You need to understand governments as economic actors, what that means to different sectors and how companies respond. These are areas in which political science as a discipline doesn’t provide you much training. So, that is the first point. Whatever people can do to get that level of market and industry expertise as political scientists is very valuable.

The second point is something very basic, but bears repeating which is that this is a field that is very punishing to partisanship. So, if the reason you are into political science is because you love politics and you feel very strongly that one side or the other is right or wrong–because you love Israel, you love Russia or you love China–you should know that political risk is not politics, it is political science. And there is a huge difference between the two.

This [political risk] is a field that is very punishing to partisanship.