Among all the risks covered in the course, which one do you see to be the most significant threat to the world. (Risks include: Retreat from globalization, WMD proliferation, Instability in the MiddleEast, Oil supply uncertainty)

Of all the political risks covered, the Iraq/Middle East threat has the greatest likelihood of triggering the other major threats. Thus, the worsening of the Iraq/Middle East situation poses the gravest threat to the growth and stability of the world economy. If the situation in Iraq further deteriorates, the threat of sectarian violence spreading in the region increases and instability results. By this threat alone, this is a serious risk. However, the chain of events it could trigger is more significant.

*Increasing incentives to join terrorism The conflict in Iraq and the Middle East, where civilian lives were lost and impoverished makes it easier for terrorist groups to attract new recruits. Destruction of lives and property, as well as the resulting chaos could popularize anti-US/Western sentiment. Also, joining terrorist groups could also be an escape from the difficulty of surviving in the ongoing chaos. The threat of this new wave of terrorist activities could result in a more unsecure world, where asymmetric warfare could break out in different regions.

*Worsening oil supply uncertainty As the Middle East region accounts for more than half of the world’s oil reserves, with Saudi Arabia alone accounting for 25%, the effect of an unstable Middle East directly leads to a more uncertain oil supply for the world. Over the recent years, the number of attacks on oil-producing infrastructure has increased. With an increase in terrorist activities, these are increasingly attractive targets as its effects will be easily felt in a world that has become increasingly more dependent on oil. An uncertain oil supply situation will derail the growth of the world’s economy. China, in particular, is expected to increase its demand for oil. As it is, its thirst for oil already puts pressure on the world supply. According to a study, if the Chinese consume like Americans, four worlds would be needed. A Middle East that endangers oil supply would likely result in major powers such as US and China competing to secure their sources of oil. A more expensive oil would also increase conflicts among states in the Middle East.

*Iraq debacle will weaken US ability to control WMD proliferation With its failure in Iraq, the US and its allies will find it increasingly difficult to influence actions on states that pursue WMD. Lacking domestic support among Americans would make it politically risky for the next US administration to lead any actions. Internationally, it would also be difficult to convince other states to support them. Even in its quest to find WMD in Iraq, the US has already acted without international popular support. To come up empty only weakened its credibility. Thus, it is now easier for rogue states to acquire WMD. This results in a more unstable environment, where WMD could also be used as leverage, the way N. Korea uses its nuclear weapons conflict to its advantage. The threat of weaker states where control over these weapons is not as strong poses a grave threat to the world. For instance, a military coup could take over the state and control over these weapons. If there are 20 or 30 states with these capabilities, miscalculation over their use is more likely.

*Unstable Middle East will eventually lead to a retreat in from globalization An unstable Middle East that leads to an unsecure world leads to decreased trade and travel across countries. High oil prices will also reduce the value of globalization thru increasing transport costs. With countries concerned over security, economic development will take a backseat. Focus will be on self-sufficiency, particularly in critical resources, such as oil, water, and security. The result would be economic dislocation for sectors/industries that benefit from globalization and a need for structural shifts that are likely to lead to social unrest as this takes place.

For these reasons, the Iraq/Middle East risk poses the gravest threat to the world growth and stability. Its effects on security thru terrorism and WMD proliferation, on economy thru oil price uncertainty and negative consequences on globalization/potential resulting economic crashes makes it the most important consideration.

2) How do you see the future of Asian region’s growth and stability?

Apart from the Middle East situation, I believe Asia will be more peaceful and international relations will improve in the foreseeable future. China’s role will be the most important in determining the stability of the region. I believe China’s leaders will be guided by economic liberalism. The need to address issues at their domestic front, of providing basic services and ensuring stability in this period of transition, where social unrest could put a halt to China’s growth, will be its main priority. Thus, keeping export markets open and attracting foreign direct investment (FDI) are of paramount importance to China. With increasing democratization, these economic priorities of its citizens have more influence on its leaders now than it did before. For this reason, we can expect China to take the lead in ensuring a more stable environment in the region, conducive for economic growth. We have also seen in the mid-1990’s that China has become more willing to build relations with S. Korea, showing that it was willing to gently expand its relations without totally alienating N. Korea. Recently, China has demonstrated its influence over N. Korea through the peaceful direction the resolution over N. Korea’s nuclear weapons conflict is taking. This shows the increasingly strong role China would play in the region and the world, as a whole.

*Trend towards peaceful resolution
In the past decade, we have seen the easing of tensions among Asian countries: North Korea and South Korea have started to open up relations to each other, even marching together during athletic events. S. Korea’s “sunshine policy” fosters closer ties and its cultural/racial history as one people will make it likely and easier to build close relations. N. Korea also needs aid and assistance from South Korea. Thus, it is unlikely to make drastic actions that would only lead to the collapse of its regime. Hongkong handover back to China has been relatively smooth. This demonstrates that both recognizes the economic benefits of a healthy relationship and that historical ties and similarity in culture among the people make it easier to have peaceful relations. I believe China will also handle issues with Taiwan peacefully, as the costs of creating instability and possibly justifying US intervention in the region is too high.

*Increased Economic Cooperation more likely As Southeast Asia continues its recovery from the financial crisis and the social unrest that it caused, the region also becomes more stable. Reforms in institutions that were prompted, to some extent by the crisis, are gradually taking place. This growth and improvement in institutions create less possibilities for social unrest and conflicts internally. Thus, it will shift the focus towards building closer economic cooperation within ASEAN and the region, as well. Japan has also recovered economically and provides another source of strength towards Asian economic growth. I believe that cooperation and economic interdependence, as what institutional liberal theorists claim, reduces likelihood of international conflict. The need for political leaders to provide economic growth to their citizens to strengthen their positions, will prevent them from taking action that could hurt their economies. This has been made possible by the trend of increasing democratization. The Indonesian experience of Suharto and even the Philippines’ Marcos shows that economic difficulties makes social unrest and political revolts more possible. In general, the pragmatism of the citizens will be reflected on the actions of the Asian leaders. This leads to an Asia that is more peaceful and more closely integrated, particularly in the economic aspects.