Growing Geopolitical Uncertainty, the "Wild Card" of the Near Future

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Growing Geopolitical Uncertainty, the "Wild Card" of the Near Future

As we learned on September 11, 2001, geopolitical threats can materialize in a moment and change the reality of our lives forever.  For investors, managers, and citizens, the real challenge is to be prepared to make the most of whatever the future holds. 

According to Stratfor Global Intelligence,1 threats that may be realized in the coming decade are looming from numerous quarters. The obvious ones include Iraq and Iran.  Other threats are not so obvious, such as Mexico. 

Mexico is particularly important, since it shares our border.  The efforts of authorities to stem the tide of drugs and the associated violence are threatening the very stability of the country itself.  There were more deaths from the drug cartels there in 2008 alone than there were U.S. soldiers killed in Iraq since 2004.

As pointed out by the U.S. Joint Forces Command in its Joint Operating Environment2 report, weak and failing states like Mexico and Pakistan present major challenges and increase uncertainty for the developed world.  The historical examples of Lebanon and Yugoslavia show how quickly a state can fail and what the long-term consequences can be.  This makes it all the more important to look carefully at what Pakistan and Mexico may hold in store for the world. 

If Pakistan were to collapse, its nuclear weapons could fall into the hands of terrorists, sharply ratcheting up global insecurity.  If Mexico were to collapse, it is not at all certain that the border could be secured.  Even as we speak, the broad economic crisis means that Mexico, which is heavily dependent on the U.S. for its economic survival, is becoming more hard-pressed.  That only makes criminal gangs bolder in their activities, since they have little to lose. 

Both of these countries are being undermined by unconventional forces, such as militias and terrorist groups.  These groups operate across national boundaries and are not subject to the normal controls on power, such as treaties.  For example, Hezbollah is a militia that has the weapons and training to fight like a state, but has none of the political and social conventions that restrain real states in the use of force. 

Modern information technology — as well as low-cost military technologies — has made it possible for small groups to wield increasing power in the modern world.  The use of the Internet for training, organization, and recruiting makes these groups far more powerful than their size would suggest...

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