China is Slowing, And the new, big "Tiger" is ...Iran and Central Asia!?


by ayatoilet1

In recent times, one of the strategies for dealing with global financial crises is to enable one region to expand and buttress economic weakness in other regions. For a long time, China has played the dual role of maintaining double digit economic expansion, and maintaining its foreign reserves in dollar and European currencies – thus effectively bank rolling budget deficits in the rest of the world. China, has in effect sustained the world economy.  But this is changing, and it will have huge implications NOT only for China and the West, but I would argue also for Iran.

 Believe it or not, Chinese women are having fewer children, but having a smaller generation follow a boom generation - and longer life expectancies - means that by 2050, it is expected that for every 100 people aged 20-64, there will be 45 people aged over 65, compared with about 15 today.

Over the medium term the country will be faced with a more hostile demographic outlook, as labor force growth turns negative. Alongside weaker western world growth, this will help to explain why Chinese growth will moderate down below double digits to between 7-9% over the next few years.

The legitimacy of Chinese communist party as a ruling group of the country since the Tiananmen Square massacre in 1989 has been based on its maintaining rapid economic growth.  An economic slowdown could prompt challenges to party's legitimacy.

Existing disadvantaged social groups, such as migrant workers and pensioners, especially those in rural areas, will be most severely affected, and the social unrest sometimes experienced in China will become increasingly common.

These facts are not simply an academic curiosity. Given how uncertain global economic growth trajectory has become, some of these changes in China will be even more impactful going forward on the world’s economy.

Quite simply put, the world will need to identify a new growth engine or region to mitigate a severe shift in China.

And Voila – and here “Central Asia”!

As we look at the rest of the world, one region alone seems to have the capability of lifting the “world” to new economic heights. China after all had very, very cheap labor as a resource. Most Chinese still live off $2 a day and obviously that is or will be changing. But what do other regions have that can ‘finance’ if you will significant economic growth? Africa, Latin America, Middle East, Central Asia, or even Russia?

Russia is in the midst of a demographic collapse, with a literal 50% contraction of its working population in the next 20 years. For sure, now after the Arab Spring, there is hope that Arabia (from Morrocco to Iraq) can provide representative governments that in the end can unite under one banner of the Arab League and work together to generate economic growth. But my fear about Arabia emerging is that Israel will be fundamentally against the emergence of a unified Arab market, and as a result torpedo this process. All it will take is a rogue individual throwing a brick at the bus of the visiting Tunisian soccer team in Egypt and busting the window  - and suddenly, bang - relations between the nations are down. The rogue individual could have been an Israeli. No the Arabs will never unite. Sub-Saharan Africa is probably well poised to provide the world with a coordinated base for growth - but not just yet. Issues like civil wars, ethnic tensions, leadership have to be confronted first.

All this leaves Latin America and Central Asia next. I believe Latin America is well poised for double digit economic growth, if a coordinated, pro-growth system can be established across the board. The issue is of course that there are political pockets in places like Bolivia and Venezuela that can undermine the process for the whole region. Brazil has 'exploded economically' because its "socialists" turned out to be very much pro-growth and enterprise. They were progressive in their thinking and sophisticated enough to understand the connections between equal opportunity, free enterprise and prosperity. Others in Latin America are still caught up in Stalin's play book in 1935. My bet is there will be multiple regions 'prepped' for growth anyway. But Central asia is better poised that any of the others for a variety of reasons.

Central Asia is essentially an ‘economic virgin’ with huge access to natural resources. Central Asia too, has witnessed first hand the stupidities of a centrally planned socialist economic system and has rejected it.

In the colonial context of the late 20th century, the West prefered to grab all the natural resources – put a bunch of dictators in charge, and milk the rest of the country by selling expensive arms (to an insecure regime) and high value infrastructure type products (airplanes, power plants etc.). Take a look at Azerbaijan as a classic case of Western political manipulations put in place in 1990.

But thankfully this model has has changed in the 21st Century. With the advent of the information age, it’s much better to sell products with higher levels of intellectual content. It’s better to ‘free up a country’ to establish a vibrant market and then sell critical high value services (not even products) to ‘suck’ money over to the West. Banking, credit cards, software, engineering, and licenses to intellectual property …you name it. Let them build it locally, we can sell them the designs (and make more money) - is the new mantra. And even better for these rising economies to maintain their foreign reserves (as China did) in Western Banks and help float fragile Western governments. It’s cleaner. It’s softer. It’s less intrusive or obvious.

And here-in comes Iran. While the Brits with their warped time mentality are pushing for Dubai to become the regions ‘capital’ and are sucking each Central Asian nation dry of their own resources (by establishing colonial style Dictatorships) – in fact Iran is in a by far better positioned to assist the West as a champion in the region in this new age.

More importantly, without clear connectivity between the countries of the region – the region cannot become a Brazil, or a China, or even a European Union that can ‘move’ in unison and provide coordinated and serious expansion. Dubai after all is across the Gulf; Iran is connected by LAND to all the countries in Central Asia…and to the Sea to help those nations’ import or export goods internationally. And Iran has significant resources of its own, to invest, to leverage, to use to help many of its neighbors make the shifts they need to make to become leaping economic “tigers”. Little land locked Tajikestan, or Turkmenistan or even Afghanistan will never rise to become tigers with their current geographic and economic challenges. They need outside help.

My basic point is that Central Asia can start where China was 20 years ago but rise and become a significant engine of economic activity and help ‘make up’ the deficit left behind as China slows down. And it is only Iran that can weave the region together to make this happen.  Dealing with the region on a nation-by-nation approach will NOT provide the scope and scale of growth NEEDED to keep global economic growth humming.

Call it a Central Asian Union with Iran as a key player (with Turkey and others taking a leading role). Call it whatever you want, a transformed Iran is critical, indeed vital, to the future of the planet. Surely this is a compelling argument for the world to inspire a change in policy vis-à-vis Iran, and put in place a transformed political structure in Iran that can lead the region forward. It is time for a change, because China is definitely changing.


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 They really have to

by vildemose on

 They really have to create another major economic block, to deal with China's negative impact. Balkanization is NOT the answer.

 Please have a talk with that paranoid zbigniew brzezinski who still runs the democrats foreign policy. As a child, he was traumatized by communism and he still thinks communists are taking the world....

Early years

Zbigniew Brzezinski was born in Warsaw, Poland, in 1928. His family, members of the nobility (or "szlachta" in Polish), bore the Trąby coat of arms and hailed from Brzeżany in Galicia. This town is thought to be the source of the family name. Brzezinski's father was Tadeusz Brzeziński, a Polish diplomat who was posted to Germany from 1931 to 1935; Zbigniew Brzezinski thus spent some of his earliest years witnessing the rise of the Nazis. From 1936 to 1938, Tadeusz Brzeziński was posted to the Soviet Union during Joseph Stalin's Great Purge.[citation needed]

In 1938, Tadeusz Brzeziński was posted to Canada. In 1939, the Molotov-Ribbentrop Pact was agreed to by Nazi Germany and the Soviet Union; subsequently the two powers invaded Poland. The 1945 Yalta Conference between the Allies allotted Poland to the Soviet sphere of influence, meaning Brzezinski's family could not safely return to their country.[citation needed] The Second World War had a profound effect on Brzezinski, stating in an interview; "The extraordinary violence that was perpetrated against Poland did affect my perception of the world, and made me much more sensitive to the fact that a great deal of world politics is a fundamental struggle

All Oppression Creates a State of War--Simone De Beauvoir


Amir-Jan, Russia is not the issue anymore - its China...

by ayatoilet1 on

You are too focused on Russia. Russia just handed Exxon its largest oil contract in Siberia; and rebuffed staunch ally Britain (and BP) fact the Brits are so pissed, they are in court with their Russian partners.

The real issue is containing China. Even with a dismal growth rate, China will supass the U.S. as the world's largest economy. That will provide China with tremendous financial muscle worldwide and redefine a lot of relationships. And it will create a lot of problems too, because the world will become so dependent on China that if it sneezes the rest of the world will catch a flu.

They really have to create another major economic block, to deal with China's negative impact.  Balkanization is NOT the answer.


That's not how they are thinking. If the thinking

by amirparvizforsecularmonarchy on

was as you describe, the shah & iran would not have been destroyed like they were by the usa.  US thought is the oil and everything to do with it is mine period, development is only allowed for me and all else must go by my economic plan for them.  Thinking on that level is impossible to get to improve out of desire for better possibilities.  The USA is resolved to dissolve Iran to keep control of the oil and ensure lack of development of the region as well as profitable conflicts to suck the money back out.  That is what their actions prove in harmoy with the literature of the bipartizan groups that run foreign.  The Wests only issue is Rivalry with Russia, because all the money and co-operation in the world will not encourage russia to open up a seat for the west or to sit at a table with the west, that will become evident.  They can't crack Iran without Russia and russia isn't interested big pieces of future Iran, because #1 the US isn't good for its word with anyone, #2 Russia is at a massive advantage over the west within Iran and has much better policies economically in its favor (as the USA continues to help extremists and IRI/Russia with its growing power can defeat the USA/west and help democrats/moderates win on the ground).  Even that doesn't make the USA change its path today, they therefore deep down must really think they can break russia and defeat putin.  or else the wests own destruction is in the cards if they can't.


I agree its optimistic ...but it shouldn't be!

by ayatoilet1 on

I agree its optimistinc, but it shouldn't be. What other options do they truly have. Balkanizing Iran will not address the core issue of a declining China. Balkanizing the region will not address the core issue of a declining China. And geting into a 'pissing match' with Russia or China isn't going to do it - either.

I mean on has to realistically look at the map and all economic options. And if you do, you realize very quickly this is a great opportunity for the world - not just the region.

The Global economy actually shrunk 0.8% in real terms. Forecasts for this year are not much better. And it may well shrink at a faster rate next year - because even a modest 1% rise in U.S. growth will not offset the massive drop from double digit growth in China to singel digits.

Contrary to many views, U.S. actually welcomed the creation of the EC and its expansion to include eastern european states. What it did not like was the Euro currency as a rival currency. This proposal is actually a good option for the world.



Optimistic, not realistic.

by amirparvizforsecularmonarchy on

Quite simply put, the world will need to identify a new growth engine or region to mitigate a severe shift in China.

no severe shifts are on the cards, the east is still that growth engine, all the countries surrounding china in particular.  Iran=suppressed for years and Russia's growth may lead to ww3 eventually, after internal poltical pressure and muslim extremism doesn't work to stop russia's advance and on a given day in the future russia exploits the caspian basin kicking out all the others.  If ww3 does not happen, then the russians and chinese are not dumb, they will easily outplay the west as they have the strength to do so, which they don't right now.  And that will be the end of the IRI and with it the wests lead in world history.  Long before Russia kicks out all others from caspian area, it will have advanced to a point where the US can not stop it kicking the US and allies out and china will happily be one of the few beneficiaries with access to the caspian resources, at this point the USA will not be able to do anything about Russian/Chinese Hedgemony and certainly won't have the relative strength to do anything about the obvious moves that they will do in Iran.  The Russians are in a better position to ally with a non extremist Iran, than the USA/West as a vital ally.  That is the real issue.  The regime change within iran for the better in opposition to US policy, now that IRi has shut the door to reform closed for good.  Personally if I were the USA, I would be on my hands and knees worshipping the democratic forces in iran, not undermining them and betraying the king and country of iran... as their behavior of the last 40 years has suggested.  The global elite are in trouble over this issue and why they are going to #1 go after russia and #2 break up Iran, but in all realty they are weak right now and declining until the USA can climb out of depression.


compelling argument for

by vildemose on

compelling argument for the world to inspire a change in policy vis-à-vis Iran, and put in place a transformed political structure in Iran that can lead the region forward 

Can you elborate? What kind of change in policy? How is the world going to put in place a "transformed Political  Structure"??

Don't get me wrong. This is excellent argument against the policy of balkanization. Now, who is going to convince and sell this idea to the Bilderberg boys??


All Oppression Creates a State of War--Simone De Beauvoir