It’s a simple fact, for Israel all roads to prosperity lead through Iran.
Over the next 35 years, the global economic power center of gravity will shift from advanced economies in North America, Western Europe and Japan to mainland Asia. China has already overtaken the US in 2014 to become the largest economy in purchasing power parity (PPP2) terms. In market exchange rate (MER) terms, and in 2028 China is expected to overtake the US.
India too, has the potential to become the second largest economy in the world by 2050 in PPP terms (third in MER terms), although this requires a sustained program of structural reforms. And close behind them new emerging economies like Malaysia and Indonesia will be larger than the UK and France. While Turkey could become larger than Italy. Let’s also not forget Vietnam that also possesses great potential for sustainable long-term growth. Close behind all this are dark horses like Iran and North Korea who have incredible economic potential if they make substantial political reform.
No one should be distracted by China – it is in fact Asia, overall, that is the real powerhouse! The real story!
Just recently, 68 countries representing two-thirds of the world’s population and half its GDP gathered in Beijing for the first Belt and Road Initiative (BRI) Summit. This gathering of Asian, European, and African leaders symbolized the launch of the largest coordinated infrastructure investment plan in human history. Collectively, the assembled governments pledged to spend trillions of dollars in the coming decade to connect the world’s largest population centers in a constellation of commerce and cultural exchange – a New Silk Road era. Israel was not one of them!
Of the estimated US$30 trillion in middle-class consumption growth estimated between 2015 and 2030, only US$1 trillion is expected to come from today’s Western economies. Most of the rest will come from Asia. Asia produces and exports, as well as imports and consumes, more goods than any other region, and Asians trade and invest more with one another than they do with Europe or North America. Asia has several of the world’s largest economies, most of the world’s foreign exchange reserves, many of the largest banks and industrial and technology companies, and most of the world’s biggest armies.
Asia also accounts for 60 per cent of the world’s population. It has 10 times as many people as Europe and 12 times as many people as North America. As the world population climbs toward a plateau of around 10 billion people, Asia will forever be home to more people than the rest of the world combined. In 2018, the world’s highest growth rates were reported in India, China, Indonesia, Malaysia, and Uzbekistan.
Western populist politics from Brexit to Trump haven’t infected Asia, where pragmatic governments are focused on inclusive growth and social cohesion. Americans and Europeans see walls going up, but across Asia they are coming down. Rather than being backward-looking, navel-gazing, and pessimistic, billions of Asians are forward-looking, outward-oriented and optimistic.
US malaise over the past two decades have been characterized by ex-president George W. Bush’s incompetence, ex-president Barack Obama’s half-heartedness and President Donald Trump’s unpredictability, and crudeness. Israel might have bet on the wrong horse by exerting massive political influence in the U.S. – when in fact, all the numbers suggest a relative decline in U.S. global influence. Asia is where it will be at. And we are slowly, but surely shifting to a multi-polar world where U.S. dictates can (and will) be ignored. The truth is, the United States is a Pacific power with a potent presence in maritime Asia, but it is not an Asian power and thus its influence will diminish as Asia rises.
Quite simply Israel needs to tap into Asia. It must find a way to locate itself on major Asian highways. It must cut across Lebanon, Syria – and eventually Turkey and Iran!
The most consequential misunderstanding permeating Western and Israeli think tanks is to think of about Asia in a China-centric way. Much as geopolitical forecasters have been looking for “number one”, many have fallen into the trap of positing a simplistic “G2” of the United States and China competing to lead the world. But neither the world as a whole nor Asia as a region is headed toward a harmonious global system guided by Chinese Confucian principles. Though China presently wields more power than its neighbors, its population is plateauing and is expected to peak by 2030. Of Asia’s nearly 5 billion people, 3.5 billion are not Chinese.
The current trade spat with China, will reverberate to new production centers in other Asian capitals. Much of the ‘off-shoring’ to China will shift. And this too, will provide an impetus for “Asian” growth (outside China).
Bottom-line, if Israel wants to expand its economy, with Europe, US and China ‘plateauing’ – its very clear that the rest of Asia is a prime market for Israeli goods and services.
So, what does this mean?
Very simply, Israel (and many of its surrounding economic powers) need access across Iran.
And what does this mean?
War! One way or another, new roads, highways, railways, pipelines – you name it – must traverse Lebanon, Syria, Iraq, Iran …
The game in Syria, Iraq, Iran … is not over. Sit tight. Everything up to now was a prequel to the main show!