Irregular Warfare: After Smart Weapons, Smart Soldiers

[mmx1]

Cover article in the Economist this week:
Brains, not Bullets; how to fight future wars.
http://www.economist.com/images/20071027/20071027issuecovUS400.jpg
http://www.economist.com/research/articlesBySubject/PrinterFriendly.cfm?story_id=10015844
http://www.economist.com/opinion/displaystory.cfm?story_id=10024437



Brains, not bullets
Oct 25th 2007
From The Economist print edition


Western armies are good at destroying things. Can they be made better at building them?


ANOTHER debate to do with Iraq and Afghanistan is building in America, one that could have important consequences for the West. This debate is being conducted in the Pentagon—and it has to do with the future shape of America's armed forces. With its far-flung alliances and commitments, the superpower rightly wants a “full spectrum” of military capabilities to deal with everything from an all-out war to a small policing action. But precisely what the mix should be is increasingly contentious—and could prove expensive.

If the biggest threat comes from rising powers, such as a belligerent Russia or a pushy China, America and its allies will need to invest in aircraft, ships and advanced weapons to cope. If the greatest challenge is the fight against militants and insurgents around the world—seen by some as a new and different “fourth generation” of warfare (see article)—then they will need more boots on the ground and, crucially, different sorts of soldiers wearing them. Sadly for taxpayers everywhere, the emerging answer from America is that a modern power needs to prepare for both challenges. But there has been a clear swing towards manpower from technology....

[SWJED]

Irregular Warfare: After Smart Weapons, Smart Soldiers (http://www.economist.com/world/international/displaystory.cfm?story_id=10015844) - The Economist, 25 October.


... Can America and its Western allies avoid similar humiliation in Iraq and Afghanistan? Martin van Creveld, an Israeli military historian, argues that insurgencies have been almost impossible to defeat ever since Nazi Germany failed to suppress Josip Broz Tito's partisans in Yugoslavia. Winning such wars requires one of two tactics: extreme restraint and patience, as shown by the British over nearly 38 years in Northern Ireland; or extreme brutality, as shown by Syria in 1982 when the army destroyed much of Hama, a stronghold of Islamist rebels, killing at least 10,000 people. Any other method, says Mr van Creveld, risks being too harsh to win the support of the population but not harsh enough to cow it into submission.

This rule is too stark. Experts point to successes such as the end of the insurgency in El Salvador, the collapse of the Shining Path rebels in Peru, the end of the civil wars in Mozambique and Angola, the demise of the Red Brigades in Italy and of the Red Army Faction in Germany. Much of this debate revolves around the meaning of victory and defeat, as well as the definition of counter-insurgency, civil war, counter-terrorism and so on. One school of thought holds that America's forces had largely defeated the Vietcong in Vietnam when its politicians lost the will to stop North Vietnam's conventional army from overrunning the south. That is to miss the point: in counter-insurgency one side can win every battle, yet lose the war...

[max161]

This paragraph sounds a lot like what Special Forces is supposed to do:

“To be fair, the Pentagon talks about building “partner capacity”, but it may need more radical steps—in particular creating new specialist units to train allies, embed Western soldiers in local forces to improve their performance and be able to call in airstrikes, and help organise civil reconstruction.”

Dave

[Ken White]

elsewhere could be as well but my spies tell me they're busy on, er, um, other tasks...

At the risk of minor heresy, my mind boggles at what just one SF Company could do in the 'Stan with an OpCon (I'd even go OpCom) light Infantry battalion and an Engineer Company plus a few other folks as far as training the ANA -- or even the cops...

Hmm. That may be major heresy. Absolute apostasy even. :wry:

Instead, we have to take ARNG Armor Battalions (Dismounted) and 'train' them to train others...

[Adam L]

Ken, I think you've gotta a point there. :)

[Adam L]

The Economist has been going down hill for a while. I don't quite get what he was going for with this article.

[/quote]Even if America cannot imagine fighting another Iraq or Afghanistan, extremists round the world have seen mighty America's vulnerability to the rocket-propelled grenade, the AK-47 and the suicide-bomber. [/quote]

1. We had already shown this in Lebanon and Somalia.
2. What has really changed is not that our enemies have shown that we are vulnerable to their attacks, but that our public cannot withstand casualties and that they can.
3. What has changed EVERYTHING is technology. Whether it is cell phones or the internet, insurgents see immediate results to their actions and are not only able to use it for propaganda, but are capable of seeing its effect on their enemy (specifically the American civilians.) Unfortunately, knocking out satellite phone, cellular phone and internet service in Iraq doesn't seem to be an option. Everything is immediate today.

Also, the British had a much easier time with the geography of Malaya. They didn’t' have to deal with Laos and Cambodia. On top of this, the SAS was in its formative years and for this reason was most capable of adapting to the situation in every way. He also ignores the fight between the military and politicians. Politicians change often in Western governments and force the military to constantly appease their desires. This impact can best be seen in Northern Ireland. All of this effects small wars.

Note: I know I seem to always be critical in my posts, but that is only because I am a critic. LOL. :D. I just don't like mid-length articles. Their purpose is unclear. They are not a summary of the issues, they fail to explore issues in their entirety and most often fail to site anything to help the reader fill in the gaps. This unfortunately has become the trend/standard.

Adam

P.S. Sorry about that rant.:)

[Ken White]

I really agree the Economist has lost it to a significant degree.

The "vulnerability" to the RPG, AK-47 and the suicide bomber is hyperbolic to say the least. It is also of no strategic, very little operational and not great tactical significance.

I'm not sure I agree that "our public" cannot withstand casualties. Certainly some object quite strongly to casualties for any war and possibly more to casualties for this war but I still firmly believe the largest majority of those disaffected by this war are less concerned with casualties than they are with performance. The bulk of the public, I think simply wants it finished and finished acceptably.

There is to my mind little question that they are trouncing us in the info war -- we have turned the corner tactically if not operationally but in the information domain we are getting zapped. :mad:

The Brits get a lot of praise over Malaya. Your point is well taken. They did okay but contrary to popular opinion, it wasn't a "win" -- it, like most other COIN ops, achieved simply an acceptable outcome. Folks also forget the massive advantage they had there -- they were the government. In Viet Nam, in Afghanistan and in Iraq, we had or have to get along with independent governments who were and are emphatically willing to operate on their own agendas and who did or do not care about US public opinion. Huge difference. :(

[Adam L]

I'm not sure I agree that "our public" cannot withstand casualties. Certainly some object quite strongly to casualties for any war and possibly more to casualties for this war but I still firmly believe the largest majority of those disaffected by this war are less concerned with casualties than they are with performance. The bulk of the public, I think simply wants it finished and finished acceptably.

I agree with you for the most part. I should have been more exact about the segment of society I was refering too. I agree most people in opposition to the continuance of this war, hold this due to our performance rather than our casualties. I do have to point out that when most people evaluate performance, casualties have a big effect. I guess I am just sick of dealing with the rather large minority that is so far out on the left, that they make Phil Ochs look like a moderate. I have had to deal with a lot of University types these days, and unfortunately it would be an understatement to say that they are leaning to the left. On top of this, too many people feel this war is something new when it is not. I myself am a great critic of this war, but that doesn't mean I am for pulling out or was agianst it I the first place. I have known enough to put it in context. When I have not now known enough I have eduacated myself. (I am of the opinion that the public libarary system, the internet and a good grasp of the English language is all that is needed for a good education. I must admit the libraries are not what they used to be. Carnegie would be disgusted.) Too many people look at this war and don't know what they are looking at. Unfortunately, this is something we see no matter the area in American politics (probably everyone else's too.) Here I am ranting again, and off topic. Sorry.:)



There is to my mind little question that they are trouncing us in the info war -- we have turned the corner tactically if not operationally but in the information domain we are getting zapped. :mad:


We need to establish a DoJ program where we give hackers more lenient sentence and perhaps a special prison if they are willing to spend thier time attacking terrorists online mainframe. This may seem a little silly, but with the amount of hackers we spend a fortune prosecuting every year, it would be easier to plea most of them out into a program like this. This would save millions and give us a more foot (or more accurately "finger") soldiers.

I guess this should go in a file at the back of the cabinet with my other silly ideas:
1. Instead of hireing Disney to make a movie that will improve our perceptions worldwide, hire the guys who marketed PokeMON. They can market anything! LOL!
2. An Arabic version of Jefferson Starship's "White Rabbit" or better yet "MacArthur's Park." I think this would be a lot more effective than deathmetal and Led Zeplin. LOL!
3. Scaring Muslim terrorists with aggressive congressional "pork." LOL!

Sorry, I just had to share those with someone.



The Brits get a lot of praise over Malaya. Your point is well taken. They did okay but contrary to popular opinion, it wasn't a "win" -- it, like most other COIN ops, achieved simply an acceptable outcome. Folks also forget the massive advantage they had there -- they were the government. In Viet Nam, in Afghanistan and in Iraq, we had or have to get along with independent governments who were and are emphatically willing to operate on their own agendas and who did or do not care about US public opinion. Huge difference. :(

True, Malaya wasn't a "win" and most often there are not "wins." Also, you are right with your distinction between the governemnt/political situation in Malaya and the other mentioned conflicts. We forget history. This is why I want "History" classes in schools not "social studies." (Yes, I know what Social Studies is and that it includes History. I just think it is B.S., and I don't mean bachelor of science.)


Adam

[mmx1]

I was not expecting this crowd to glean anything new out of the Economist piece. However, we're not the target audience, and I'm interested in it mainly for its effects in educating the Western mainstream about small wars and the consequences it has for the organization of our militaries. This piece and the accompanying article on restructuring Western militaries for small wars made the cover of this week's edition. In particular, the irregular warfare piece can be better understood as a piece of supporting background information for the cover article on military transformation.
http://www.economist.com/opinion/displayStory.cfm?Story_ID=10024437

I believe the statement about ak-47's, RPG's, and suicide bombers is meant to be hyperbolic - they are universally understood symbols of the guerilla.

[Ken White]

I was not expecting this crowd to glean anything new out of the Economist piece. However, we're not the target audience, and I'm interested in it mainly for its effects in educating the Western mainstream about small wars and the consequences it has for the organization of our militaries. This piece and the accompanying article on restructuring Western militaries for small wars made the cover of this week's edition. In particular, the irregular warfare piece can be better understood as a piece of supporting background information for the cover article on military transformation.
http://www.economist.com/opinion/displayStory.cfm?Story_ID=10024437

I believe the statement about ak-47's, RPG's, and suicide bombers is meant to be hyperbolic - they are universally understood symbols of the guerilla.

Almost certainly on the intent of the RPG, etc. inclusion as well -- my concern is that many readers of the Economist won't recognize the hyperbole...

[Watcher In The Middle]

Originally posted by Adam L:

We need to establish a DoJ program where we give hackers more lenient sentence and perhaps a special prison if they are willing to spend their time attacking terrorists online mainframe. This may seem a little silly, but with the amount of hackers we spend a fortune prosecuting every year, it would be easier to plea most of them out into a program like this. This would save millions and give us a more foot (or more accurately "finger") soldiers.

Give them a special "prison" (actually, a walled off apartment complex would work just fine), with a few bundled T12s (or really get serious and get them an even bigger pipe), all high speed wireless, 24 hour food service, and an open account at newegg (well, ok, a $100k limit) - hell, you'd never get them to leave. Oh, and btw, the guiding principle is "The Only Rules Is There Ain't No Rules" - and then stand back & watch.

Give this team 9 to 12 months to take on the jihadists - IT'S OVER!! The jihadists won't have a chance up against this bunch.

And guess what - it will be a whole lot cheaper than throwing them in federal prison. In fact, you might actually have a really hard time getting them to leave once their sentence was completed.

[walrus]

At the risk of raising blood pressures and getting myself banned, I have to say that the Economist has done an excellent job and the derogatory comments about the article and the British demonstrate exactly why we are in the trouble we are in in Iraq and to a lesser extent Afghanistan.

To put it another way, some of you just don't get it, and you don't know that you don't get it - which is why you don't like the Economists take on things.

Lets start with some neurolinguistics again "Framing" - if you frame Iraq as a "war" and then tag it as something that is either a "win" or a "lose" you are setting yourself up for disappointment, because these concepts don't compute in an insurgency.

Take Malaya for example, the British didn't call it a "war" it was officially described as "The Malayan Emergency", the campaign in Northern Ireland against the IRA hasn't been called a "war" either.. The "enemy" (for want of a better word) weren't regarded as "soldiers" fighting a "War" they were regarded as criminals performing criminal acts and if caught they were dealt with by the civil justice system.

Names DO matter because with each name there comes a whole host of connotations; War - enemy - defeat - victory - soldier - winning - losing - battle.

The end state we eventually reach in Iraq is not going to be defined as a "win" or a "loss", that much is obvious already. Instead we will ultimately settle for some sort of political compromise that will have good parts and perhaps bad parts from our point of view. The Economist implicitly understands this.

What the Economist also implicitly understands is the total weakness of Foreign Army of occupation (any foreign army) against a well organised domestic insurgency movement that has a measure of popular domestic support. Look no further than the American War of Independence if you want an example.

The simplest example I can give of this asymmetry is from my own past: I was once given that most delightful role you can have in a war game - playing the enemy, in this case the VC. We had a ball, and every night we went to sleep with the alarm clock set for 0200 or thereabouts when we would get up and carefully creep towards a perimeter, throw a few grenade simulators and make some noise, then we'de go back to bed in the knowledge that the poor guys in the base were going to be stood to for the rest of the evening. - Thats asymmetry - liittle effort by us - big effort by you.

Gen. Schwartzkopf, the greatest commander America has produced since WWII in my opinion summed it up brilliantly at a press conference I heard before Gulf War One. A journalist asked him about precautions being taken against the possibility of Iraqi minefields and how many mines there might be?

Schwartzkopf simply replied "Son, all it takes is one mine." Same again - little effort by minelayer - big effort by us.

There is a video on You Tube of a radar controlled Gatling gun destroying incoming mortar bombs at Balad. Great demonstration of technology and a great video, but I couldn't help from thinking about how much it was costing in ammo to destroy each of these old $5.00 81 (or 82)mm mortar rounds. Same thing - little effort by insurgents - big effort by us. Thats asymmetry

I also fail to understand the comment that:


The "vulnerability" to the RPG, AK-47 and the suicide bomber is hyperbolic to say the least. It is also of no strategic, very little operational and not great tactical significance.

No significance? How many billions have been spent on hardening vehicles? How many billions are spent on road blocks, checkpoints and god knows what other security measures to deal with these threats in Iraq??? Not significant???? Of course they are significant because they have constrained the way we must operate every day, all day!

"Winning" in counterinsurgency, as it was taught to me, involves getting people, including the insurgents, into a state where they think that its going to be better for them in future to either stop fighting or stop supporting those doing the fighting, and as we have sadly seen "Shock and Awe" just doesn't cut it as a motivator. The Economist seems to understand this.

Sorry for the rambling post, it saddens me deeply that some people just don't get this.

[Ken White]

...
To put it another way, some of you just don't get it, and you don't know that you don't get it - which is why you don't like the Economists take on things.

Most of us here have been saying the same thing the Economist said for some time. I went on a rant longer than yours just about the stupidity of the words 'victory,' 'war' and 'win.' :wry:

I suggest there's a difference in deciding something is superficial as opposed to not "liking the Economists take on things" in the sense that anyone disagreed with it.


The end state we eventually reach in Iraq is not going to be defined as a "win" or a "loss", that much is obvious already. Instead we will ultimately settle for some sort of political compromise that will have good parts and perhaps bad parts from our point of view. The Economist implicitly understands this.

Neither you or the Economist have a patent on understanding that problem. Again, a numberl of us have made that point


What the Economist also implicitly understands is the total weakness of Foreign Army of occupation (any foreign army) against a well organised domestic insurgency movement that has a measure of popular domestic support. Look no further than the American War of Independence if you want an example.

Or that point. The recurring thread not only on this board but from most of the folks in the US DoD for some time is that we can screw it up, only the Iraqis and the Afghans can fix it. I guess you missed all that as well...

I'll also note that most of us are more than aware of the screwups, plural and by many actors, that got us to this point and have had no problems stating that.


The simplest example I can give of this asymmetry is from my own past: I was once given that most delightful role you can have in a war game - playing the enemy, in this case the VC. We had a ball, and every night we went to sleep with the alarm clock set for 0200 or thereabouts when we would get up and carefully creep towards a perimeter, throw a few grenade simulators and make some noise, then we'de go back to bed in the knowledge that the poor guys in the base were going to be stood to for the rest of the evening. - Thats asymmetry - liittle effort by us - big effort by you.

That is a simple example. Having spent a couple of years in Viet Namese rice paddies against the real thing, they were a little more painstaking than you were -- they would almost never attack a fixed position without at least two painstaking reconnaissance peeks. They also had RPGs and AKs -- didn't do the suicide bit though, just got a lot of their own folks killed by getting caught before they got to the wire. :D


Gen. Schwartzkopf, the greatest commander America has produced since WWII in my opinion summed it up brilliantly at a press conference I heard before Gulf War One....

We can differ on that...


There is a video on You Tube of a radar controlled Gatling gun destroying incoming mortar bombs at Balad. Great demonstration of technology and a great video, but I couldn't help from thinking about how much it was costing in ammo to destroy each of these old $5.00 81 (or 82)mm mortar rounds. Same thing - little effort by insurgents - big effort by us. Thats asymmetry

Yes it is. It's also not smart on a couple of other levels but we have a bad habit of relying on technology rather than training and trying to insure troop comfort to almost the same extent we go to in protecting troop safety. Penalty of living in a democracy with a dim, panicky legislative body and collectively more money than good sense. *


I also fail to understand the comment that:
""The "vulnerability" to the RPG, AK-47 and the suicide bomber is hyperbolic to say the least. It is also of no strategic, very little operational and not great tactical significance.""

No significance? How many billions have been spent on hardening vehicles? How many billions are spent on road blocks, checkpoints and god knows what other security measures to deal with these threats in Iraq??? Not significant???? Of course they are significant because they have constrained the way we must operate every day, all day!

The items have no significance -- the people using those things are quite significant. They are doing the things you state, so I guess you and the Economist missed that one. It's not the hardware, it's people and their mind and dedication...

Oh -- and those vehicles? Comment * above applies.


"Winning" in counterinsurgency, as it was taught to me, involves getting people, including the insurgents, into a state where they think that its going to be better for them in future to either stop fighting or stop supporting those doing the fighting, and as we have sadly seen "Shock and Awe" just doesn't cut it as a motivator. The Economist seems to understand this.

Sorry for the rambling post, it saddens me deeply that some people just don't get this.

I think most everyone here gets that and has for some time. One could even say that's why this board exists (note the Title and headers). The Economist is apparently not a reader or contributor, others who stop by only sporadically may also miss some commentary. Nothing wrong with that. Except perhaps those real VC with their painstaking recon before attacking might have been able to show one something about taking the effort to know what one is attacking instead of assuming things...

[Adam L]

I am going to have too agree with Ken almost 100% here.

We are more dissapointed in the Economist, which has for many years a periodical of fine caliber, that unfortunately has been deteriorating. Our (I believe I am not talking for just myself. Correct me if I'm wrong. :)) objection to the article is that it is a summary of issues which have been, and are being debated and discussed which is myopic and selective in its view of this situation and it historical parallels.


What the Economist also implicitly understands is the total weakness of Foreign Army of occupation (any foreign army) against a well organised domestic insurgency movement that has a measure of popular domestic support. Look no further than the American War of Independence if you want an example.

I think anyone who has been following this site is aware of that.


Gen. Schwartzkopf, the greatest commander America has produced since WWII in my opinion summed it up brilliantly at a press conference I heard before Gulf War One....

Perhaps the greates persona ( the past 30 years), but don THE GREATEST personality or general. Desert Storm was impressive, but far from perfect. He put far too much confidence in technology and air power finding targets (specifically SCUDS) on the ground. Whether or not he was misguided in his confidence is an issue for debate. His record on this and other issues precludes him from holding the title of "the greatest commander America has produced since WWII." I do greatley admire the man, but that goes too far. I would however give him and award for, "gallantry in the face of Press." He certainly new how to deal with them.

For everything else I want to say, see Ken.

Adam

[goesh]

MO says when confroting religious autocrats at the regional and national level whose ideology is grounded in Quranic Socialism, there is going to have to be a bit more destroying than building. The new ideology and tactics may be producing more temporary accomodation on the part of indigenous peoples/host forces that fundamental change. Rigid paternalism, rigid monothesim and rigid tribalism have been around alot longer than than empowerment, cultural sensitivity and warm hugs. If you ain't marrying their women and praying some to their God, you ain't going to leave much of a footprint behind when you go home.

[Steve Blair]

Gotta agree with Ken - lots of agreeing to disagree with the piece (which is little more IMO than a rehashing of the obvious with a lot of hot air tossed in for good measure) and some other comments (Schwartzkoph's 'greatness' comes to mind immediately, but there are others as well).

[Rank amateur]

What's obvious to you, isn't obvious to everyone. I thought it was a decent summary of key concepts written in a way that amateurs could understand.

As point of reference, I'm sure most Iraqis would laugh their ass off at our Iraqi culture discussion because they are full of gross simplification and the obvious. It doesn't mean that they're not helpful to someone.

Also, I need to disagree with Ken's earlier point. The fact that 150,000 - give or take - US soldiers are tied down in Iraq and Afghanistan by people with PRGs and AKs greatly increases the likelihood of Iran getting the bomb and that obviously has major strategic geopolitical implications.

[Ken White]

. . .

Also, I need to disagree with Ken's earlier point. The fact that 150,000 - give or take - US soldiers are tied down in Iraq and Afghanistan by people with PRGs and AKs greatly increases the likelihood of Iran getting the bomb and that obviously has major strategic geopolitical implications.

You do note that you and I say it's the people -- which was my point -- and not the tools? We can agree on that much. :wry:

I disagree that US Soldiers being occupied (as opposed to "tied down") in Afghanistan and Iraq is likely to greatly increase the likelihood of Iraq getting "the bomb." If it has any effect at all, it is more likely to deter them. Give it some thought.

Nor, for that matter, do I think that even if Iran had a nuclear capability that the strategic implications would be major -- acknowledging that you and I would probably differ on what constitutes 'major.'

[walrus]

When I read comments and hear military commentators expressing frustration about counterinsurgency and "Hearts and Minds" activities, etc., I am reminded of an old saying: "When your only tool is a hammer, every problem is a nail."

My perception of the American military (biased of course because I'm Australian) is that it has been designed for the precision application of overwhelming firepower - which is something it does very very well, as was demonstrated in Gulf War One ( by my hero - Gen. Schwartzkopf).

The problem with a counterinsurgency environment is that firepower is not the issue, as we have sadly seen, the AK47, RPG, a few dud 155 rounds and a garage opener is quite sufficient to produce mayhem. The problem is not about having sufficient weaponry to apply to targets, its about finding the targets in the first place and then deciding what to do with them. Under such circumstances, as the Economist has pointed out, it's the brains of your troops and their training and experience that are your critical, limiting, asset.

I do not know enough about American training to be able to comment, but Australian infantry training, always emphasized the absolutely critical importance of junior leaders (Cpl, Lance Cpl) and section operations (about ten men). A very very high premium was placed on initiative, problem solving and independence, (almost to the point of insubordination).

I am speculating of course, but I wonder if this is where the gap is that The Economist is trying to delicately point out?


As for being sensitive about culture, anthropology, etc. etc. it's not about being namby pamby and group hugs at all. It's about getting inside the enemy's skull so that the message you are sending is coherent and understood, bearing in mind that to succeed against an insurgency, you have to convince the population that there are better things to do in life than become a suicide bomber.

I'll know that the message has gotten through when I see troops taking off their sunglasses before they talk to Iraqis.

[skiguy]

I'll know that the message has gotten through when I see troops taking off their sunglasses before they talk to Iraqis.

You mean like this?(taken from the MNF-Iraq website)

http://members.cox.net/skiguyken/071024_fea1_sm.jpg

[Ken White]

of what you now say. Not all, but much...


When I read comments and hear military commentators expressing frustration about counterinsurgency and "Hearts and Minds" activities, etc., I am reminded of an old saying: "When your only tool is a hammer, every problem is a nail."

So are a lot of people -- and if you read more threads here you'll find that hammer problem is cited by many.


My perception of the American military (biased of course because I'm Australian) is that it has been designed for the precision application of overwhelming firepower - which is something it does very very well, as was demonstrated in Gulf War One ( by my hero - Gen. Schwartzkopf).

This is true -- and it is an object of much discussion here and all over the Army. My complaint is that we did a great job of designing the US Army after World War I to fight World war II. It did that fairly well; not great but fair. Unfortunately, the US Army still has too strong tendencies in that direction. As many here say frequently and that you apparently missed.

You might want to do more research on Schwarzkopf. He was not the architect...


The problem with a counterinsurgency environment is that firepower is not the issue, as we have sadly seen, the AK47, RPG, a few dud 155 rounds and a garage opener is quite sufficient to produce mayhem. The problem is not about having sufficient weaponry to apply to targets, its about finding the targets in the first place and then deciding what to do with them. Under such circumstances, as the Economist has pointed out, it's the brains of your troops and their training and experience that are your critical, limiting, asset.

As is also frequently said here by many...


I do not know enough about American training to be able to comment, but Australian infantry training, always emphasized the absolutely critical importance of junior leaders (Cpl, Lance Cpl) and section operations (about ten men). A very very high premium was placed on initiative, problem solving and independence, (almost to the point of insubordination).

We do not do that nearly as well as you, the Poms or the Canadians. IMO there's no excuse for not doing better. I can give you reasons (mostly involving Congress and money allocation; hardware trumps training -- dumb but there it is). So I agree with you on that. However, many here have made the same point...


I am speculating of course, but I wonder if this is where the gap is that The Economist is trying to delicately point out?

Of course it is.


As for being sensitive about culture, anthropology, etc. etc. it's not about being namby pamby and group hugs at all. It's about getting inside the enemy's skull so that the message you are sending is coherent and understood, bearing in mind that to succeed against an insurgency, you have to convince the population that there are better things to do in life than become a suicide bomber.

I'll know that the message has gotten through when I see troops taking off their sunglasses before they talk to Iraqis.

I could quibble with the wording in your penultimate paragraph but I generallyagree. Agree totally with the words in your final paragraph (though I doubt you'll see that happen for US cultural reasons)..

BTW, you do realize that the grenade simulator tossing in the example you cited in your post yesterday offered absolutely zero training value to your mob or the other guys?

Nobody's perfect... :D

My point in both responses to your posts is that I think you've must have missed several discussions here that touch on all the topics you mention and pretty much in the same vein as your comments. You jumped in assault mode and pretty much hit the wrong targets. Most here think pretty much the same way you do.

[Rank amateur]

You do note that you and I say it's the people -- which was my point -- and not the tools? We can agree on that much. :wry:


Well if you believe that the art of war means that there will always be countermeasures to any tool, then I'll says it's the combination of people and the terrain and the tools, but there were some very smart guys in the Pentagon who thought our technology would allow us to "Shock and Awe" the Iraqis, so the average Joe wasn't the only one who needed a reminder that it's not just about the tools.

Re: Iran. CNN reported that a couple days after Saddam's statue fell, Syria was told "You're next." I don't think the policy was changed because Cheney and Rummy had a change of heart. It was a "lack of available resources." And Syria didn't even make the "Axis of Evil," so I believe that a bunch of guys with AKs and RPGs have already bought Iran more time to work on "the bomb."

[Rank amateur]

Walrus:

It's a good idea to make sure you're on defensible ground before you expose your position. If you aren't, you will be "Schwartzoffed." ;)

[Ken White]

It's all about people and what they do, want to do and can do. All war is -- people are the objects that develop the countermeasures to any tool and which developed the original tool.

Calling attention to items of hardware is a distractor from concentrating on what the enemy is doing -- that's what's important.

I'd submit that the guys in the Pentagon and anywhere else in the US government who created, used or allowed to be used the term "shock and awe" were far from smart. Rather stupid, IMO. Same goes for anyone from Bush down to include uniformed people who applied words like 'war,' 'win,' 'lose,' or 'victory' to the operations in either Afghanistan or Iraq. I could add more but you get the drift.

Those are the same people who took 18 months to tumble to the fact that they had created an insurgency, another 18 months to wake up and start turning it around -- and that's twice as fast as the same 'smart guys' (or same types, ranks and egos) did in Viet Nam. So we gotta give 'em a little credit for being quicker on the uptake than the Kennedy and Johnson crowds -- but only a little... :(

It's all about people.

We have been playing footsie with Iran for 28 years. They bluster and stamp their foot, then we do the same thing. It's a push and shove match, not a fight.

We did the same thing, precisely, with North Korea from 1953 forward -- that's 54 years; long time -- and it may or may not be over yet. We'll be playing the same game with Iran for a bit longer

My personal belief is the we had and have no intention of invading Iraq or Syria for a great many reasons. Rhetoric by politicians is a constant bother, I pay no attention to them myself -- just watch what they do... :rolleyes:

Iran isn't stupid; like the Kims, they'll push us just so far and will pull back before going over the line. They know that in spite of Putin's visits and talk, they cannot really depend on Russia. They know the US troops in Iraq (and Afghanistan, both sides of Iran) can turn pretty quickly, the Air Bases have all been expanded, the US Army is now the most combat experienced large Army in the World, the Navy and the Air Force are not heavily committed and our defense industrial base is cranked up. Ahmadinejad and some of the Pasdaran dipwads may say they discount that but Khameini knows all that and he's a shrewd old dude. Our presence in Iraq is a drag, not a facilitator, for Iran. And they know it.

[Watcher In The Middle]

Originally posted by Ken White:

Ahmadinejad and some of the Pasdaran dipwads may say they discount that but Khameini knows all that and he's a shrewd old dude. Our presence in Iraq is a drag, not a facilitator, for Iran. And they know it.

Ken, would you be kind enough to expand on your comments above (particularly the last 2 lines)?

It strikes me that the Iranian leadership isn't worried so much about tomorrow, as much as the "day after tomorrow", where it seems like Iraqi military development left unto itself is somewhat uneven, but under US tutalege, seems to develop to a much higher standard of competence, and it also happens considerably faster. If similar principles are also applied to different sectors of the economy, and also to infrastructure in Iraq, that could spell some very serious issues for Iran down the road. Iran could be facing an Iraq that could literally zoom right on by them in terms of both political and economic development.

Thoughts?

[Ken White]

First, my comment you quote was based mostly on the military factors and near term at that. Simplistic.

I always get caught when I get lazy...:o

In the final analysis, the internal security of Iraq has to be an Iraqi effort, no question. However, for now, we effectively are the guarantors of Iraq's external security and we can do that. We will probably do that for some time. Iran would obviously like to delay Iraq's ability to do that themselves (the Iran-Iraq war is still fresh in their minds) so they have a desire to keep us in Iraq and to keep us occupied internally; two birds and all that, keep Iraq discombobulated and tweak us at the same time. However, they have a conflict because they also really want us out of the area to avoid us being the local cop but my guess (and that's all it is) is they don't want that to happen too soon. Thus they have a balancing act and I suspect that balance is a matter of controversy among the power structure in Tehran.

You are quite right to look at the broader considerations. Based on living there -- no expert, no westerner will ever really be expert on the people of the ME in my opinion -- I have no doubt they are worried about several years down the pike but I doubt the economic considerations are terribly significant in their minds. Regime survival is probably paramount and regional hegemony is a close second. They put great stock in the Persian Empire and are inclined to be dismissive of Arabs (Which the Arabs know and which makes for some interesting interplays) and have a sense of superiority in that regard. That and a lot of Oil give them a near term sense of some power.

My one fear is that their near term problems will cause them to to miscalculate and do something dumb; probably not but they can be volatile and overly excitable.

I'm sure their sharp Economists -- and they are a nation of bright people -- are warning of the future as well as trying to fix the rather poor internal conditions at this time but I also suspect the political concerns are paramount and the economic considerations fall in down the column a bit.

They do the math and know they have a significant numerical advantage but I think there may be some concern Iraq will settle down and draw in western investment while they fear Iran will likely not do as well in that regard so they are indeed confronted with a very delicate long term problem as well as the near term problem of our presence.

I would anticipate little change as long as Khameini is alive. There will likely be an internal squabble over his replacement; If Rafsanjani succeeds, life may get interesting. :cool:

Just some quick late night thoughts. Perhaps Rex, who's been there recently and is far more current than I am has a better idea.

[Watcher In The Middle]

Ken:

Having been a pol, and on the sidelines by my choices, I've been watching as the various factions of our (US) political leadership (both parties) try to figure out how best for the West to "negotiate" with Iran. Having somewhat of a political understanding helps me understand how different political environments here in the US are framing the issues, and why.

But your comments on this and other threads are the first real logical (what I would call "street smart") approaches to developing a coherent set of logical objectives/methods which we should be using in approaching any negotiations with Iran.

Examples: Let's assume your comments re: Iran on both this and previous threads are reasonably (at least 85%+) valid. If so, then I would comment the following conclusions are available to us:

01 The Islamic Republic of Iran is much more of a "Statist" type of government than most of the other ME nations.

02 This approach (maybe the wrong word) carries over into the economic climate, and does not appear to be decreasing influence. But the effects are a stagnating economy, even with oil prices.

03 Internal political concerns are the driving factor, including over their economy (Much different from the West, where at the end of the day, economics drives virtually everything - certainly political).

04 With economics you know what the sides (factions) are - with political factions, you don't. So Iranian leadership has communications which become much more complex, decision making avenues are far less clear, and few, if any decisions get made quickly. "Today's rules aren't tomorrow's rule, and just forget about what next week's rules will be".

05 Our real strength in "negotiating" with Iran isn't in politics (we are way too impatient), but in economics.

Reasoning: We are trying to get Iran to "move" on certain issues. But their entire governing structure is predicated upon not moving quickly, and certainly not predictably. So, we end up pitching our weakness as a negotiating position against their strength. Does not look to be smart on our part.

06 But if we pitch on economics, and also upon rebuilding Iraq's economy/infrastructure (regardless of Iran), we can totally change the formula. We keep talking to Iran, just don't expect to really achieve anything out of the negotiations. If Iraq's economy develops & gets stronger, Iran will be facing a set of very unfavorable choices. Under those terms, we will end up negotiating from a position of strength.

Opinions? Btw, comments are very welcome and much appreciated. Btw, please excuse my approach in writing this - I'm probably writing/framing the issue as typical political types would.

[Ken White]

your sanity with that 85% attribute; they barely give me 50% on average. The boys will go with 90, the girls way, way less... :o

Excellent post. I agree with most all of it and would only add some very minor comments.

On 01, you are correct but their desire to be even more statist than they are is adversely impacted by their size geographically and by the diversity ethnically. About 70% are Persian and thus essentially similarly inclined but are very much divided into really secular, partly secular and hard line religious camps -- with the obvious leanings and shadings. The other 30% are Arab (~4%) and various tribes including Baluch -- who are anti-Persian -- and Kurds who have mixed emotions and ties. The are a number of smaller tribes but most are not total adherents to the line from Tehran. Thus, correct but with recurring problems in implementation.

With respect to 04, true and greatly exacerbated by the custom of Taarof (LINK) (http://en.wikipedia.org/wiki/Iranian_etiquette) which complicates everything in Iran from religion to the economic patterns. It shades all their dealings, internally and externally. I'd note here that one of their big complaints is that they believe we do not accord them the respect the inheritors of the Sassanid dynasty, fellow Aryans and the largest nation in the ME deserves. IMO, they have a valid point.

Re: 05, true and that is made more difficult by the fact that haggling is the national pastime there.

I think your 06 is where we are. That's why I've never subscribed to the mantra that "Iran is the big winner." They aren't, they're in a tenuous position and they know it; thus their balancing act.

As I said, excellent summation. All I offer is some slight amplification on three points as I see the situation. Again, Rex has been there recently and could offer other thoughts.

[tequila]

01 The Islamic Republic of Iran is much more of a "Statist" type of government than most of the other ME nations.

I'd disagree on this. Iran is definitely a "statist" economy in that there are few truly independent private entities, but this is true for almost every single ME economy with the possible and recent exceptions of Lebanon, Turkey, and Israel. Egypt has taken some liberalizing steps of late, but has not escaped the model by a long shot.


06 But if we pitch on economics, and also upon rebuilding Iraq's economy/infrastructure (regardless of Iran), we can totally change the formula. We keep talking to Iran, just don't expect to really achieve anything out of the negotiations. If Iraq's economy develops & gets stronger, Iran will be facing a set of very unfavorable choices. Under those terms, we will end up negotiating from a position of strength.

I think you are overestimating two things - the near-term vitality of the Iraqi economy and its negative effects upon Iran.

The Iraqi economy has been shredded not just by the past five years but also by the 30 years of Ba'athist corruption, war with Iran, and the ruinous sanctions regime. Its literacy rate was below 50% in 2003, and much of the remaining educated and professional class has fled. Their return will require both peace and a government that they find acceptable - since many of these are Sunni expelled by Shi'i religiously-based party militia, a government dominated by the same may not be. Even given peace in the region, the Iraqi economy for the next 10-15 years will be utterly dependent on the oil sector and American aid.

I think also that you underestimate the capacity of Iran to economically engage with a peaceful Iraq. All the major Shi'i and Kurdish parties have extensive ties with Iran and it has already become the principle import conduit for southern Iraq. Anecdotal reports indicate that Iranian manufactures and Chinese imports routed through Iran dominate Iraqi markets in the south. This flow, along with the enormous pilgrim trade to Najaf and Karbala, will integrate southern Iraq into Iran's economic orbit in the coming years. What do you think persuaded Iraq's southern tribes to convert to Shi'ism in the 1800s, anyways? A peaceful Iraq dominated by Iran-friendly parties will only seek closer ties to its permanent neighbor.

Thus I disagree with Ken about Iran being the winner of this war. The removal of a hostile Saddam is a huge plus already. It removes their primary security threat and opens up a previously closed arena for trade. That southern Iraq and now Baghdad are dominated by Shi'i religious parties that Iran has built close partnerships with for the past 20 years is another enormous boost. A ferocious enemy has been converted into, at worst, a weak and divided hinterland to be exploited and at best a friend and ally.


About 70% are Persian and thus essentially similarly inclined but are very much divided into really secular, partly secular and hard line religious camps -- with the obvious leanings and shadings. The other 30% are Arab (~4%) and various tribes including Baluch -- who are anti-Persian -- and Kurds who have mixed emotions and ties. The are a number of smaller tribes but most are not total adherents to the line from Tehran. Thus, correct but with recurring problems in implementation.


Don't forget the Azeri population. About 20-25% of the population and represented out of proportion in the clerical leadership (including the Supreme Leader and several prominent hardliners), the officer ranks of the military and IRGC. Hardly "oppressed", but there is some resentment amongst the lower classes about the dominance of Persian language and Persian culture. The ethnic Persian population is under 55%.

[Ken White]

You're correct about the Azeris but they are not marginalized the way the tribes are and thus I included them with the Persians; ethnically different to be sure but an integrated part of the Persian polity and believers in the 'Greater Persian Empire.' Thus 24% Azeri and 51% Persian equate to "about 70%."

You say:

"That southern Iraq and now Baghdad are dominated by Shi'i religious parties that Iran has built close partnerships with for the past 20 years is another enormous boost. A ferocious enemy has been converted into, at worst, a weak and divided hinterland to be exploited and at best a friend and ally."All true -- but I think you ignore the deep antipathy of the Persian (and the Azeri :) ) for the Arab and the strength with which that feeling is returned by the Arabs. That and powerful Iraqi xenophobia mitigate quite strongly against any real win for Iran. Recall that Iraqi Shia fought well against Iran in the Gulf War. They will cooperate as long as it suits but the likelihood of bedding down together is I believe remote.

I agree that Iraq will be divided on sectarian lines but that line is bridgeable and I think economic recovery in Iraq will exceed your expectations and will help in that bridging. On that, we'll have to wait and see. If I learned nothing else in the ME I learned that things are rarely as they seem and you have to bore down a few layers to get even an approximate sensing. Even then, your probability of accuracy is only about 50%...:D

We can disagree on the Iraniha gaining much out of our attack on Iraq. That they did achieve some pluses is unquestioned but they also had a lot of problems dropped in their lap, problems they are not sure how to handle. On balance and over the long term, I believe the negatives to Iran outweigh the positives. Time will tell and we'll have to wait and see.

[Watcher In The Middle]

Originally posted by Tequila:

I think you are overestimating two things - the near-term vitality of the Iraqi economy and its negative effects upon Iran.

The Iraqi economy has been shredded not just by the past five years but also by the 30 years of Ba'athist corruption, war with Iran, and the ruinous sanctions regime. Its literacy rate was below 50% in 2003, and much of the remaining educated and professional class has fled. Their return will require both peace and a government that they find acceptable - since many of these are Sunni expelled by Shi'i religiously-based party militia, a government dominated by the same may not be. Even given peace in the region, the Iraqi economy for the next 10-15 years will be utterly dependent on the oil sector and American aid.

I think also that you underestimate the capacity of Iran to economically engage with a peaceful Iraq. All the major Shi'i and Kurdish parties have extensive ties with Iran and it has already become the principle import conduit for southern Iraq. Anecdotal reports indicate that Iranian manufactures and Chinese imports routed through Iran dominate Iraqi markets in the south. This flow, along with the enormous pilgrim trade to Najaf and Karbala, will integrate southern Iraq into Iran's economic orbit in the coming years. What do you think persuaded Iraq's southern tribes to convert to Shi'ism in the 1800s, anyways? A peaceful Iraq dominated by Iran-friendly parties will only seek closer ties to its permanent neighbor.

Got to disagree with the above. I work with a number of finance type players, and my observations are that Iraq is just starting (ever so slightly) to edge it's way onto the "Investment" radar screen.

It's not any one thing that is doing it, but changes and trends in a number of things that are starting to create ever so slight of a buzz. I got a very quick 10/15 minute run-through on Iraq, with pluses, minuses, and angles I would have never considered. But, when your investment decisions are worth big time money, you look for those factors, because oftentimes, that's all you have to work with.

The individuals drew an extremely interesting comparison of Iraq to Vietnam, only not in the way that most would think. Vietnam was a truly war ravaged nation, and they kept on fighting into the early 1990's, and the first key step to create normalize relations with the US occurred in July, 1995. The first major trade deal took place in 2000. Vietnam today is a very fast growing Asian "Tiger", and that's with a government that is well known for (still) throwing obstacles into the way of free and open trade. And yet, they are growing like a weed, and international investment money is pouring in.

Iraq will, in all likelyhood, do considerably better in terms of economic growth than Vietnam. Iraq has a well educated, very, very innovative culture (and also very entrepreneurial), and that does not even address their natural resources.

One major point brought to my attention is that post Saddam, Iraq and it's citizens have embraced technology as if it is a long lost love. Cell phone, sat TV, internet, a fairly open and free wheeling press - compare that to other neighboring nations which seem to be on a quest to suppress technology use by their citizenry.

If you are an outside investor, that's a real telling sign. Also, Iraq has another "asset" which one should not discount - there is a substantial base of Iraqi expats and naturalized US citizens living in the US, and those individuals are a tremendous asset to take into account in any investment decision making.

One last point made to me was that Iraq's trading partner might be Iran today, but tomorrow could easily be a different story. In fact, Iraq could easily be confronted with a very stark choice - if you keep trading with Iran, you loose the opportunity to trade with the West. As Iraq changes and develops, Iran will have to do the same (as a trading partner). If they don't, Iraq will change to use other trading partners. I'd bet that money will trump ideology any day - even in the ME.

Wish I could share more of the discussion here, but I can't. Let's just say that it was an amazingly fascinating discussion and insight into large scale international capital investments (developing markets).

In terns of economics, if I were Iran, I'd be concerned. Could easily be left in Iraq's dust.

[Rex Brynen]

I, like Tequila, don't see Iraq as a significant economic player for a long time to come. DFI likes political stability and the rule of law, something which is pretty distant at the moment.

Moreover, when Iraq is more secure, the attractions of oil-led growth will likely seduce Baghdad (as it has almost every other high income oil exporter) into policies that use economic policy for patronage and redistribution, creating economic distortions that hamper non-oil-sector growth. This will also likely be aggravated by "Dutch disease" effects on Iraqi exchange rates due to oil earnings, further undercutting non-oil sector competitiveness.

As for Iran, its a mixed picture. Non-oil economic performance has been poor, but this has been largely offset by increased oil earnings, thus reducing the incentives for reform. There are many in Iran for whom the incentives of increased trade with the West are a highly attractive part of a possible geostrategic "Grand Bargain." There are others for whom increased trade with the West is a strategic threat, or at least not much of a prize at all. Both sides influence policy.

Finally, a comment on whether Iraqi love of technology puts them in a position of comparative advantage regarding their neighbours. No, not at all--the whole region loves cell phones, and Iraq doesn't come close to the GCC states in this regard. Almost the entire region (Iran partly excepted) depends on satellite TV as their primary news source. Internet penetration in Iraq is not especially high (http://www.internetworldstats.com/stats5.htm) by regional standards.

[goesh]

"I'd bet that money will trump ideology any day - even in the ME." (watcher in the middle)

You got that right:

http://www.msnbc.msn.com/id/21593805/

updated 33 minutes ago
TOKYO - Markets in Asia and Europe slumped Friday, tracking losses on Wall Street overnight as investors worried about a possible end to U.S. interest rate cuts and a slowing American economy.

Hong Kong's benchmark index plunged over 3 percent and markets in Japan, China, South Korea and Singapore fell more than 2 percent."

2+ points is huge and I got a crisp 20 says China will give the nod for increased sanctions on Iran, which of course bodes well for capital input in Iraq

[tequila]

The individuals drew an extremely interesting comparison of Iraq to Vietnam, only not in the way that most would think. Vietnam was a truly war ravaged nation, and they kept on fighting into the early 1990's, and the first key step to create normalize relations with the US occurred in July, 1995.

Uh, what? Vietnam was still fighting a civil war in the 1990s? You're not referring to Cambodia, are you?


Iraq will, in all likelyhood, do considerably better in terms of economic growth than Vietnam. Iraq has a well educated, very, very innovative culture (and also very entrepreneurial), and that does not even address their natural resources.

They used to be well-educated. Things changed after 1991, and are worse now. (http://www.irinnews.org/report.aspx?reportid=62433)


The United Nations Educational, Scientific and Cultural Organisation (UNESCO) estimates literacy rates to be less than 60 percent, or 6 million illiterate Iraqi adults. People in rural areas and women are worst off. Only 37 percent of rural women can read, and only 30 percent of Iraqi girls of high school age are enrolled in school, compared with 42 percent of boys.



One major point brought to my attention is that post Saddam, Iraq and it's citizens have embraced technology as if it is a long lost love. Cell phone, sat TV, internet, a fairly open and free wheeling press - compare that to other neighboring nations which seem to be on a quest to suppress technology use by their citizenry.

Rex addressed this already, but this doesn't sound very realistic. All those are things are widely available throughout the Middle East (except for the freewheeling press, which is not really present in Iraq either) and South Asia.


If you are an outside investor, that's a real telling sign. Also, Iraq has another "asset" which one should not discount - there is a substantial base of Iraqi expats and naturalized US citizens living in the US, and those individuals are a tremendous asset to take into account in any investment decision making.

There are only 90,000 legal Iraqi immigrants (http://www.migrationinformation.org/USfocus/display.cfm?ID=113#1)in the U.S. Given the remarkable lack of American visas granted to Iraqis, I don't see how this number has increased much at all. Compare to the 280,000-strong Iranian exile community (http://www.migrationinformation.org/USfocus/display.cfm?ID=404)in the U.S., which is much better educated and wealthier as well.


One last point made to me was that Iraq's trading partner might be Iran today, but tomorrow could easily be a different story. In fact, Iraq could easily be confronted with a very stark choice - if you keep trading with Iran, you loose the opportunity to trade with the West. As Iraq changes and develops, Iran will have to do the same (as a trading partner). If they don't, Iraq will change to use other trading partners. I'd bet that money will trump ideology any day - even in the ME.

Iraq does very little trade with the West except for oil, and this will not change no matter what. Saddam sold oil to the U.S. up to and including 2003 - in fact, Iraq's biggest oil export year to the U.S. was in 2001.


Wish I could share more of the discussion here, but I can't. Let's just say that it was an amazingly fascinating discussion and insight into large scale international capital investments (developing markets).

In terns of economics, if I were Iran, I'd be concerned. Could easily be left in Iraq's dust.

Iran's population size, oil and gas reserves, and comparatively high education levels indicate that it has most of Iraq's good features with the added bonuses of no major sectarian violence, civil strife, or enormous refugee flows/displaced population.

[wm]

I have to agree with Tequila as to the credability of most of the stuff stuff WitM listed as making Iraq a desirable place for investing. However I do see another possible reason for seeng American venture capital going into Iraq. Several nations out there, like China, have a whole lot of bucks to invest overseas. I think the US is pretty far down on the list of nations with cash reserves available for investment. It might be that US investors are looking to jump into Iraqi investments early. Then they can sell off to investors from those other nations at a profit later. It's what I call the "I hope Microsoft buys me out" model of entrepreneurialism.

We might want to consider that we may end up losing influence in the long run if China, et. al. start investing large amounts into Iraq and other ME/SWA nations' private development coffers.

Here is an additional concern. A lot of US growth is capitalized by foreign money invested in its businesses. One might wonder what would happen should China and others find a different place to stick their extra gelt.

[Watcher In The Middle]

Originally posted by Tequila:

Iran's population size, oil and gas reserves, and comparatively high education levels indicate that it has most of Iraq's good features with the added bonuses of no major sectarian violence, civil strife, or enormous refugee flows/displaced population.

That's fine, but really quite irrelevant. There's virtually little new inflow of outside capital into Iran, because most foreign banks and investment sources are running from the possibility that they could end up in a deal with an IRGC front company, and that's heading toward committing corporate suicide, especially if you have substantial business interests in the US.

That's really unlikely to change anytime soon - in fact, all the signals are that non US banks and multinationals are looking to exit Iran (or certainly minimize their exposure) as fast as is practical.

And as in the last few years the IRGC has suddenly "appeared" as being the new business partners in a number of pre-existing deals with international corporations, which that caused those multinationals a great deal of corporate indigestion, and many of those deals have resulted in losses, if not outright loss of the contracts. After you get burned, you don't tend to be in too much of a hurry to go back for Round 2.

I'm more comfortable with iraq than Iran, simply because Iraq's government knows it is going to be facing crunch time on some very major political/economic decisions in the very near future. No side stepping those decisions - going to have to make the decisions. Good or bad - we'll see. But those decisions will get made, because there's no alternative.

Iran's political leadership does not see it that way. Looks like their intent is to maintain their own power base. And if it's a negative investment climate for outside investment, an approach of "more of the same" really doesn't result in any improvements.

To play on an old style Yogi Berra-ism, We'll see what happens after it all plays out.

[Watcher In The Middle]

Originally posted by wm:

Here is an additional concern. A lot of US growth is capitalized by foreign money invested in its businesses. One might wonder what would happen should China and others find a different place to stick their extra gelt.

The PRC had US related assets of about one trillion dollars this last reporting (little bit above, I believe). That's a hammer, but relatively speaking, it's not a giant hammer. The EU nations collectively have a much larger amount of US financial collateral, I believe (will have to check those numbers for certain).

But there's a few very recent issues (most current quarter) for the PRC, that affects their investment capabilities. First off, orders from US corporations (not all, but many sectors) to companies in the PRC are decreasing for the most current quarter. Started at the end of the last quarter, have dropped off even more for this quarter. With the US dollar being cheaper, China's trade edge shrinks, and that horde of US financial assets starts to shrink.

Secondly, the increasing oil prices per Bbl. are hitting the PRC much harder than the US. Prices in the $90's per Bbl. aren't good for us, but are even more damaging to the PRC (less efficient per Bbl.; plus many of their exports are petroleum intensive). Double whammy.


I think the US is pretty far down on the list of nations with cash reserves available for investment.

Valid assumption before the very recent (and apparently, still ongoing) subprime and related mortgage investment meltdown. But right now, that whole area currently qualifies as "Dead and Deader" in terms of being a destination for large scale investment capital. That money (non-sunk capital) that was flowing into those areas will have to go elsewhere.

This weekend could be really ugly (Re: subprime and related mortgage investment meltdown).