Stratfor on Iraq and Ukraine

From Barron's Up and Down Wall Street column:

...TO GET A READ ON WHAT the future holds for the Mideast and Ukraine, we telephoned one of our favorite experts on geopolitics, George Friedman, founder of the private intelligence service Stratfor, headquartered in Austin, Texas. His judgments tend to be more nuanced and long-term than those of the press or Wall Street. He sometimes can veer into the semi-apocalyptic realm. Indeed, ongoing crises are good for Stratfor, which boasts an enviable roster of global clients, including major corporations and numerous government intelligence and foreign-relations arms. But sometimes, it's better to be safe than sorry. And Friedman has had a pretty good batting average. 

As far as the Middle East goes, he foresees a decade or more of sectarian and tribal battles -- bloody civil wars that will rip apart the artificial nation states created by the 1916 Sykes-Picot Agreement that sought to reorganize the Middle East detritus of the old Ottoman Empire. 

He calls the likely process the "Lebanonization" of the Middle East, pitting Shiite against Sunni, ethnic group against ethnic group, clan against clan, and tribe against tribe in pitched battles, red of tooth and claw. Syria and Iraq probably won't survive in their current form, despite the best efforts of the Great Powers to keep them intact. "Bashar al-Assad, for example, will just become another warlord presiding over a much smaller enclave," Friedman contends.

The U.S. will have no choice but to stay involved politically and militarily because of the region's heft in the world energy market, particularly if the fighting spreads to Jordan, Saudi Arabia, and the Gulf States. Saudi Arabia, for example, has a restive Shiite population on its Persian Gulf coast, where much of its oil-production capacity rests. It also must worry about blowback from radical Sunni groups like ISIS, which it helped spawn and finance, but now worries about.

About the best that can be hoped for, says Friedman, is that exhaustion eventually sets in throughout the region, as it did in Lebanon following its bloody civil war from the mid-1970s to the late '80s. That yielded a weak central government with numerous religious, ethnic, and clan factions, all with their own militias and ever-shifting alliances of convenience. All of this is likely to foster turbulent energy, bond, and stock markets in the decade ahead.

As for Ukraine, Friedman has a different view of Vladimir Putin's performance there than does much of the Western press. Whereas Putin is commonly viewed as the consummate power politician, a chess player many moves ahead of the competition, Friedman claims that he has so badly bungled the Ukraine situation that he might be deposed as president of Russia in the not- too-distant future.

"Forget his sky-high voter approval ratings in Russia," Friedman asserts. "There are rumblings of discontent inside the Kremlin over his apparent loss of Ukraine to the West, in conjunction with a poorly performing economy being driven into recession in part by U.S. and EU economic sanctions arising from confrontation in Ukraine. One shouldn't forget that Khrushchev was dumped by close Kremlin associates in 1964 as a result of the diplomatic humiliation the USSR suffered in the 1962 Cuban missile crisis and economic woes over the next year and a half."

No nation on Russia's periphery is more important to Moscow than Ukraine. After all, it once was Little Russia, the very font of Russian civilization and culture, going back more than a millennium to the Kievan Rus confederation of Slavic tribes. Ukraine has always acted as a key geographical buffer to the Russian heartland, which now is faced with the European Union and perhaps even NATO pushing right up to the border of Mother Russia. Likewise, Friedman points out, the economies of the two nations have long been closely integrated. Much of Russia's military equipment is produced in Ukraine.

The original demonstrations in Kiev that led to the March ouster of Ukraine prime minister and Putin ally Viktor Yanukovych were triggered by Putin's insistence that Yanukovych torpedo an association deal with the European Union and instead accept a loan bailout and trade agreement with Moscow....MORE 

Putin's Big Miscalculation - Barron's