Kosovo Crisis Points to Global Realignment

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STRATFOR's
Global Intelligence Update
March 29, 1999

Kosovo Crisis Points to Global Realignment

Summary:

Stratfor predicted both the Kosovo crisis and Serb-Iraqi 
collaboration in our January 1999 Annual Forecast.  We also said 
that the Russians were critical to these situations.  Our 
reasoning: the world is in a massive realignment designed to 
create an international system that can limit U.S. power.  The 
Kosovo crisis is not so much a Russian trap for the Americans as 
an American created trap for itself, a gift to those who want to 
bring the U.S. down several notches.

Analysis:

On January 4, 1999, our Annual Forecast stated that:  "The Serbs, 
supported by the Russians, will test the United States in Kosovo. 
There is increasing danger of a simultaneous challenge from 
Serbia and Iraq, straining U.S. military capabilities 
dramatically."  Then, on January 25, 1999, we wrote the 
following:  "Something odd is going on.  The Iraqis are not 
allowing the latest crisis to die down, but are challenging U.S. 
aircraft with missiles and are deploying forces southward.  Their 
newspapers are full of threats directed toward Kuwait and Saudi 
Arabia.  At the same time, the Serbs deliberately carried out a 
massacre that was intended to be detected, and then intentionally 
exacerbated the crisis by trying to expel a senior diplomat.  
There is now the real possibility that Baghdad and Belgrade are 
coordinating their actions to simultaneously pose challenges that 
strain U.S. military capabilities.  At the same time, Russia has 
taken on a much more assertive role, demanding that the U.S. not 
attack either Iraq or Serbia. The U.S. Post-Cold War coalition 
has completely broken down.  Russia, France and China are all 
resisting the U.S.  A window of opportunity has opened here for 
the Iraqis and Serbs.  We see signs that they are now taking 
advantage of it, perhaps in concert."

Today's British Sunday Telegraph is reporting that Yugoslavia and 
Iraq in fact signed a secret cooperation treaty.  Under the 
agreement, Iraq would provide Yugoslavia oil and money in return 
for Yugoslavian help in rebuilding Iraq's air defenses.  
According to a British Foreign Ministry spokesman quoted by The 
Telegraph: "We are aware of the reports that there is a 
connection between the Iraqi and the Serbian regimes.  Obviously 
this is a cause for concern and demonstrates the sort of company 
that Milosevic is now keeping.  The Prime Minister is aware of 
these reports.  Nothing would surprise us about Saddam or 
Milosevic."  In other words, the British are confirming the 
reports.

The point here is not simply to demonstrate how right we were, 
although we don't mind if anybody notices.  Rather, it is to try 
to demonstrate that things are not as chaotic as they appear.  
There are broad, global forces at work that have led the world to 
this current crisis in Yugoslavia and which point the way to 
events beyond.  When we consider why Stratfor reached the 
conclusions it did in January, it will be easier to understand 
what these forces are and what they portend.

Stratfor has been focusing for several years on the 
disequilibrium of the international system.  Like everything 
else, the international system seeks equilibrium.  Ever since the 
collapse of the Soviet Union, the system has been unbalanced.  
The United States was not only overwhelmingly powerful, but no 
conceivable group of nations could resist the basic thrusts of 
U.S. policy.  Given U.S. political and economic supremacy, 
virtually all nations, save a small group of "outlaw" nations, 
were prepared to collaborate with the United States.  Put 
differently, any nation not prepared to collaborate with the 
United States was, by definition, an outlaw or rogue state.

Over time, it was inevitable that other nations would seek to 
create a counterbalance to the United States designed to create 
room for maneuver for themselves.  Creating such a counterbalance 
was extremely difficult.  The economic advantages of 
collaboration with the United States were so great, that 
political or military resistance to American initiatives was 
irrational.  Neither Russia nor China, for example, would 
collaborate with each other if the consequence of such 
collaboration would be American economic retribution.  Thus, 
since 1991 an extremely strange and even unnatural disequilibrium 
dominated the world.  The United States presided over a global 
coalition and isolated any nation that would not participate.

The Asian economic crisis and the Russian economic collapse were 
only barely connected economically.  Yet, they were profoundly 
connected politically.  As Russia's and China's economies 
struggled under the burdens of economic contraction, each began 
to experience a degree of internal political instability.  Each, 
in its own way, sought to stabilize its economy by reigning in 
liberals (those who sought collaboration with the United States) 
and increasing dependence on conservatives (those who sought to 
pursue a course simultaneously more nationalistic, and more 
political and military in nature).  The liberals and economists 
grew weaker.  The conservatives, apparatchiks and generals grew 
stronger.

For a year now, China and Russia have been cautiously moving 
toward entente.  However, the Russian situation, which is both 
more grim economically and more powerful militarily, evolved 
faster.  Nationalists, conservatives, apparatchiks and generals 
essentially seized control of Russia, ousting westernizers, 
liberals, technocrats and economists.  The new faction -- 
realizing that economic help from the West was not forthcoming, 
insufficient or actually irrelevant to Russia's economic problems 
-- sought to create a political space within which Russia could 
reassert its geopolitical interests.

The United States, believing that the events of 1989-1992 had 
permanently transformed the world so that only the American 
geopolitical understanding was viable, resisted the Russian 
attempt to redefine its sphere of influence.  The Russians became 
more uneasy and aggressive.  It appeared logical to us that 
Russia would find it in its interests to create a new bloc partly 
to defend itself, partly to assert itself and partly as a 
bargaining chip against the IMF and the United States.  Few 
nations would initially collaborate with Russia.  The rogue 
states were the exception and three rogue states were of 
particular interest: Serbia, North Korea and Iraq.  North Korea 
was dangerous to Russia because of proximity, and because of 
potential Japanese and Chinese responses.  So the Russians put 
that one on the back burner.

Serbia and Iraq, however, were perfect.  What made them perfect 
was that they were completely isolated, would rapidly move into a 
position of dependency on Russia, were of marginal importance to 
Russia so that they could be abandoned if need be, and most 
important, their behavior would drive the Americans up a wall, 
increasing Russia's leverage.  Given Russia's position, it was 
obvious to us that if the Russians were rational, they would 
quietly align themselves with Serbia and Iraq and create a 
coordinated crisis designed to psychologically stun the United 
States and open the door to a redefinition of the international 
system.

In examining the options, it seemed clear to us that two things 
would happen.  First, the Russians would do everything to 
encourage the Iraqis to pin U.S. forces in Iraq.  Second, the 
Russians would encourage Serbian intransigence over Kosovo.  By 
covertly supplying critical military supplies and providing 
public political support, Russia created a space in which both 
the Serbs and Iraqis could resist U.S. military pressure.  
Ideally, from the Russian point of view, the United States would 
find itself in a position where, for the first time since World 
War II, it was conducting air campaigns simultaneously in two 
widely dispersed theaters.  The ideal for the Russians was an 
ineffective, prolonged campaign in Iraq and an intensive one in 
Serbia.  Neither can succeed, neither can end, both will together 
sap U.S. military strength while straining the American alliance 
system.

This should not be thought of as some conspiracy theory.  The 
Russians did not create the current situation.  All they did was 
provide limited resources and encouragement to two isolated 
nations that the United States, of its own volition and inertia, 
was committed to redefining.  Russia did not create the American 
obsession with Iraq and Serbia.  All that the Russians did was to 
provide them with sufficient material and confidence to be 
willing to reject American ultimatums.  

Therefore, Iraqi-Serbian cooperation is a given in two senses.  
First, they would have to be idiots not to cooperate.  And in 
spite of the nasty U.S. tendency to underestimate its opponents, 
neither Milosevic nor Saddam is even slightly stupid.  Second, 
and more important, they now have a sponsor for their 
cooperation: the Russians.  The Russians want to bring down the 
Americans several notches in order to increase their leverage.  
Coordinating two rogue states is a Russian specialty.  They are 
doing it well.

This puts the Russians in an excellent position.  The head of the 
IMF is in Moscow today. A Russian delegation is in Belgrade, 
having first met with Richard Holbrooke, architect of the current 
U.S. Serbian policy.  Having demonstrated their willingness to 
resist the United States and their ability to do so, the U.S. 
must either dramatically escalate the air war and introduce 
ground forces, or it must negotiate from a much weaker position 
than before.  Now, the U.S. needs the Russians to speak to the 
Serbs and possibly to guarantee the peace, a role the Americans 
have normally reserved for themselves.  The coincidental presence 
of the IMF in Moscow is not really that relevant, because 
Russia's economic problems are beyond redemption.  Nevertheless, 
there will have to be a payoff.

But the big story now is Russia's relationship with China.  In 
1972, China and America ganged up on Russia in order to stop its 
tremendous momentum.  Today, the players shift their partners but 
the game remains the same.  Russia and China have a joint, 
strategic interest in hemming in the United States.  With U.S.-
Russian relations in terrible shape and U.S.-Chinese relations in 
nearly as bad disarray, the danger to the American global 
position is substantial.  China and the U.S. are having a summit 
in a few weeks.  With Russia on the knife's edge of hostility or 
cooperation with the U.S., China is an extraordinary position to 
demand concessions, and failing to secure them from the U.S. to 
then realign itself with the Russians.

These are the fundamental issues facing the U.S.  The Kosovo 
issue is and was a side issue.  The key to the lives of the 
Kosovars is not in Washington but in Belgrade and Moscow.  Serbia 
wants guarantees of a unified, sovereign nation.  Russia wants a 
sphere of influence.  So does China.  The real issue is does the 
United States know what it wants, and knowing it, is it 
achievable and at what cost?  There are far greater stakes on the 
table than Kosovo.  That was obvious in January and that is 
obvious today.