Guest Column: Khanna Explains The Second World

Today we have the pleasure of helping to launch a terrific new book. It's The Second World: Empires and Influence in the New Global Order, by Parag Khanna, director of the Global Governance Initiative at the New America Foundation. I asked Parag to write for the blog today not only because of the quality of his book, but because his travels took him through our turf, and he came away with a different take from my own in some cases, in particular about Gazprom. Without further ado, here is Parag's posting:

Thanks very much to Steve (with whom I share a terrific editor at Random House) for allowing me to post an introductory note on this esteemed blog about my book, which has been released today.

The book covers my travels through about 40 countries to look at their changing and increasingly multi-directional leanings, and focuses on societies that are increasingly divided socially, politically, and economically between haves and have-nots, winners and losers, first- and third-worlders -- hence the "second world." It's a happy coincidence that the countries of interest to O&G readers used to be called the "second world" until the term fell out of use. I spent quite some time in Ukraine, Turkey, Georgia, Azerbaijan, Kazakhstan, Uzbekistan and the like for my research.

I want to jump into two ongoing debates: Gazprom/Europe and the Shanghai Cooperation Organization/Afghanistan.

Very often Gazprom diplomacy and Russian diplomacy are taken as synonymous, and recently the two have appeared as well-coordinated as Chinese synchronized divers. But we should not forget last year's tiffs with Belarus, and the current bickering in Ukraine, both of which serve as examples of corporate logic undermining diplomatic logic.

Gazprom's demand that Belarus -- Russia's only major ally in the former Soviet Union (alongside perhaps Armenia and Tajikistan) -- pay market prices didn't win it friends other than those who saw bankruptcy and incorporation into a State Union with Russia as desirable. It also woke up EU members to the need to diversify fast.

And in Ukraine, the creation of RusUkrEnergo to continue Gazprom's bullying for constant pay-outs on amounting arrears has only alienated wider segments of Ukraine's leadership. One can only imagine that the population is as well, meaning that future election outcomes may not be as close a split between Russian and Western -leaning sides as has been the case to date. Gazprom logic would care little for such an outcome. But an increasingly Russia-skeptical Ukraine could abandon caution and welcome overtures from NATO more than it has to date -- making Putin's worst fear a reality. Diplomacy is about making friends, while corporations exist to make money. Unless Russia balances the two, oil and glory may not be forever connected.

Furthermore, the argument that Russia has Europe permanently over a barrel on gas supply assumes a long-term Russian stability while ignoring that it is Europe that can invest in diversification over the long term, drawing more oil/gas from North Africa, for example, thus gradually increasing its leverage over Russia.

The other issue is the recent talk of NATO reaching out to China (perhaps via the Shanghai Cooperation Organization, known as SCO, though Russia for obvious historical reasons wants no part in any Afghan operations) to potentially run a Provisional Reconstruction Team (PRT) in Afghanistan, or run one jointly with other nations, even the U.S. Apparently the offer was made, and China was enthusiastic, but their letter to the State Department is said to have gone unanswered for lack of coordination with NATO or a decision on how exactly to respond. So the U.S. may have dropped the ball. (Any updates/insights on this would be appreciated.)

Across the 'Stans, it's only a matter of time before NATO and SCO mingle ever more closely, and friction possibly occur. Rumors from on the ground (yet again) that the Kyrgyz might demand a shutting of America's Manas base have such maneuvering at their root. So concrete outreach between the two "alliances" beyond mundane briefings in Brussels would be where geopolitics and diplomacy intersect today. That could be quite exciting to watch unfold as NATO stands on the brink of failure in Afghanistan while Chinese and Iranian infrastructure projects -- such as in Tajikistan and Afghanistan -- move forward across the region, eventually allowing the two to connect safely overland.

Will it be the new Great Game or new Silk Road? I predict both: America continues to support political liberalization in the region, meaning some opening to greater cross-border flows, while also hoping to maintain lily-pad like bases across the region. From China's view, it too requires open borders to facilitate its exports while importing energy, and through the SCO sees itself ever more as a contributor to regional stability. Throw in Russia and Europe and you have a recipe for all the intrigue and mystery that characterized both the Silk Road and Great Game eras.