World War III Is the third global war round the corner?

FOR the past seven decades, since the end of World War II, global leaders, defence policymakers and military experts have speculated about how, when and where World War III will happen. The when and where is immaterial today; given the hundreds of hot and dangerous spots across the globe, it can happen anytime, anywhere. The how, though, is still relevant. During the Cold War, it was felt that the new global war would be instigated by one of the two superpowers, America or the Soviet Union. The Cuban missile crisis was a prime example of this mindset.

After the Soviet break-up, the focus shifted to rogue elements, who could access nuclear weapons from the disintegrated Communist regimes to spark a world war. Later came the theory of the clash of civilisations—Christianity versus Islam—which initially popular, was later discredited, and then revived in recent years. During the Second Gulf War, the thinking was about weapons of mass destruction, be it biological, chemical or nuclear. There was also talk about a global cyber or technological war that could lead to a global economic meltdown.

In the second decade of the 21st century, it is clear that World War III will be inspired and characterised by three factors—an aggressive attack on national currencies, capture of nations’ natural resources, and either direct or indirect terror-like military strategies. The trio can conspire to bring nations to their knees, and force them to bow to the diktats of nations, or elements, that are able to realise such objectives. In fact, a look at events over the past two decades is enough to prove that such conspiracies are already being enacted.

There is now a clash between currencies to gain global primacy—dollar, euro, yuan, and possibly the rupee—over the next two decades. The US, Europe, China, India and others have joined an aggressive and neverending race to acquire global natural resources in Africa, central Asia, Latin America, and even some of the developed nations. At the same time, while the smaller countries and informal global groups have resorted to direct terror tactics, developed ones like the US, France, Russia and China are using their military strengths to terrorise the world.

What was till a few years ago seen as disparate global trends have converged into an umbrella strategy that can lead to World War III. Imagine a nation, or a global group, that can crystallise a vision to combine currency warfare with the battle for natural resources, and underline it with terror tactics to achieve the first two objectives. Imagine the combination between Al-Qaeda or IS (Islamic State), George Soros, the legendary currency speculator, China with its single-minded focus to capture global natural resources, and Russia with its military strength.

In effect, imagine an America that uses its political, diplomatic, military and corporate clout to wage an overt and covert war not just in Iraq or Syria, but across the Middle East, Africa and Asia. Substitute America with Russia, China, or even the IS, and one can visualise the character and contour of World War III. It will not be about religions or territories. It will be about a nation’s or group’s ability to effect a grandiose combination of different kinds of naked powers.

Currency wars
Over the past three decades, entire nations, even continents, have capitulated to attacks on their currencies. Speculators and traders, whether cajoled by vested national and global interests, or for sheer greed of profits, have forced governments to accept their scheme of things. They have shoved and pushed regimes across the globe to adhere to their visions and blueprints. Currency warfare has become one of the best ways to push the world to the brink of a global war. Even the most powerful currencies, be it the dollar, pound or euro, are not safe anymore.

The turbulent 1990s witnessed waves of attacks on various global currencies. In the early years of the decade, hedge funds, either led or violently aided by the legendary Soros, launched a virulent war on the British pound. Apparently, Soros made a billion-dollar profit as the pound fell and lost its relevance.

It forced Britain and Italy to opt out of the newly formed European Monetary System, a precursor to the grand European Union. The hedge funds wrecked the foundations of the European Exchange Rate Mechanism, which was a critical pillar of the Union.

While the smaller countries and informal global groups have resorted to direct terror tactics, developed ones like the US, France, Russia and China are using their military strengths to terrorise the world

THE late 1990s saw the onset of the Asian currency crisis, which was engineered by currency speculators, possibly backed by interested nations. As currencies across East Asia, including Malaysia, spiralled into an unstoppable free fall, the then Prime Minister of Malaysia, Mahathir Mohammed, questioned the motives of the speculators. According to a paper by RawiAbdelal and Laura Alfaro, Mahathir called Soros—the former thought the latter was behind the currency crisis—a ‘moron’. Soros said Mahathir was a “menace to his own country”.

It turned out to be a classic ‘Market versus Mahathir’ interaction, where the market-backers felt it was important to discipline errant governments, and the rulers felt that the idea that the market will discipline government is sheer nonsense. It was a case of who will decide what is good for a nation—external forces or nationalistic ones. It was a narrative where a country had to decide whether it would accept the diktats of western interests, or adhere to its notions of right and wrong. In the end, apart from Malaysia, other East Asian nations accepted the market.

After the East Asian crisis came the Russian rouble collapse. In the late 1990s, Russia’s leader, Boris Yeltsin, was unable to appoint a Prime Minister that he wanted as the currency downfall led to deeper economic crisis in Russia. In the end, Yeltsin had to accept nationalistic demands, and appoint a Prime Minister who was a compromise candidate. Yet again, a former superpower almost lost its economic freedom, and had to fight to regain its clout. It took almost two decades for a smaller Russia to become a recognised global force in 2015.

The 21st century witnessed an epic currency battle, the kind that can easily lead to World War III. It was a tussle between the dollar, which had dominated global currencies for several decades, especially after World War II, and the fledgling euro, a European currency that was born in 1999. In the initial period, the euro lost out to the dollar. From 1 euro=$1.2, the euro slumped to 83 cents within months. But suddenly things changed. A slowdown in the US economy, slump in its share prices, and 9/11 forced investors to shift from dollar to euro.

However, the crucial support for the euro came when the largest oil producers decided that they wanted their income from crude sales to be designated in euros rather than dollars. First, in November 2000, Iraq told the United Nations that its earnings from the Food-for-Oil programme should be in euros. Iran, another America-hater, converted half its foreign exchange reserves from dollar to euro. North Korea, which was among America’s top-most enemies, too said that it wouldsoon shift to the euro. These shifts could have proved cataclysmic forthe dollar.

In the early part of this century, the dollar was so powerful that half of the global exports, two-thirds of all the official global foreign exchange reserves held by various nations, and four-fifths of global foreign exchange transactions were denominated in dollars. As nations bought dollar assets to save their incomes, the inflows helped America. If the nations, especially those who earned huge amounts from sale of oil, decided to shift to the euro, they would sell their dollar assets, which would force the dollar down. It would mark the end of the dollar hegemony.

Several experts felt that this was one of the reasons for America’s second attack on Iraq. It wasn’t really about weapons of mass destruction, but it was an attempt to preserve the dominance of the dollar too. As Outlook wrote in 2003, “Once (George) Bush gains control over Iraq’s oilfields, he can pressure OPEC to fall in line. He can then send signals to unfriendly nations—including oil producers like Russia and importers like China—to stick with the dollar. The US can also play the stick-and-carrot game with Saudi Arabia, whose switch is critical in the currency war.” The objective: prevent oil producers and global importers to shift from the dollar to euro.

Battle for natural resources
AFTER World War II, most of the nations in the Middle East, Africa, Latin America and Asia turned their backs on Western hegemonies like the US and European countries. Over the next few decades, natural resources assets, especially in oil and gas, and minerals, were nationalised, or appropriated from the western companies. A wave of nationalised capitalism set the tone for ownership of natural resources. This forced American and European firms to seek new agreements with nations, or seek new opportunities in uncharted territories.

Then came the China wave. By the end of the first decade of this century, it was clear that China was into aggressive acquisition of global natural resources. According to a 2010 study by Theodore H Moran, “Backed by the Chinese government, Chinese companies have been acquiring equity stakes in natural resources, extending loans to mining and petroleum investors, and writing long-term procurement contracts for oil and minerals. These activities have aroused concern that China might be ‘locking up’ natural resource supplies, gaining ‘preferential access’ to available output, extending ‘control’ over the world’s extractive industries.” One of the prime examples of such control was in Africa. According to venturesafrica.com, “Across Africa, the growing presence of Chinese investments in economy and infrastructure is evident. In the last ten years, various state-owned firms… have become major investors in Africa with China being the single largest bilateral source of annual foreign investment in Africa.” However, what was unique about China was its alternative and innovative attempts to forge close links with African nations. For example, “in sports, China’s investments in Africa, popularly termed ‘Stadium Diplomacy’, has been focused on infrastructural developments which has and will, inevitably in the future, result in marked improvements in certain sports.”

China built several football stadiums across Africa in a soccer-crazed continent. In most cases, China bore the entire cost of construction through concessional bilateral loans. In other cases, strategic partnerships were forged that enabled the building up of world-class football facilities. The recent rise of African nations in World Cup football tournaments can be attributed to the building of such assets that allowed citizens to watch world-class teams in action.

An article in The Economist noted, “Chinese firms are going global for the usual reasons: to acquire raw materials, get technical know-how and gain access to foreign markets. But they are under the guidance of a state that many countries consider as a strategic competitor, not an ally. As our briefing explains, it often appoints executives, direct deals and finances them through state banks. Once bought, natural resource firms can become captive suppliers of the Middle Kingdom.”

Now several other nations have joined the new global game. The ones which own the natural resources, like Australia and Latin America, wish to leverage their strengths to get the best out of competing nations like India and China. The ones which seek natural resources, like India and China, hope to do deals that will favour them. In some cases, India and China have joined hands in strategic partnerships to acquire natural resource assets.

Links with terror
Now add to the wars on currencies and battle for natural resources, state-sponsored terror, indirect form of militancy, and the rise of global groups that can control the economies of a nation or region. State-sponsored terror is not akin to what Pakistan does in India, but what America has done in Afghanistan, Iraq, and now Syria. It is equivalent to the rise of Russia’s regional ambitions that have rejuvenated in the past year or so with its humungous rise in military expenditure. It is akin to China’s support of dictatorial regimes across continents, just the manner in which America and Britain did in the past few decades.

INDIRECT form of terrorism was perfected by Saudi Arabia over the past few decades as it reportedly exported jihad through donations, support to conservative educational institutions in the Islamic world, and covert aid to nations and groups that were keen to support militancy. This has happened for several decades but Saudi Arabia, and then Iran as the Shia competitor, took it to another level. Over the years, Pakistan tried to act as a Sunni counterbalance to Saudi Arabia, but the size of its nation and economy prevented it from usurping Saudi’s global objectives.

The rise of Al-Qaeda, and now the IS, are sure-shot examples of what independent groups can achieve, and aid in fuelling a global war. American- led efforts to neutralise and decimate Al-Qaeda were a form of a global war. The same is true with the globalised, though uncoordinated, attempts to eliminate the IS. But imagine if the IS, or the new form of Al-Qaeda, get support from several nations, as was, and is, the case with them. Until now, Europe and the US have prevented such focused strategy. But who’s to know what can happen in the near future.

Combine all the above three elements and one can imagine the face of World War III. It will be unlike what one has imagined so far. It will be completely different from the various theories that have emerged so far. It will be a combustible combination of economics, diplomacy, politics, militarian and terrorism. It will take a form that will be complex and difficult to unravel.

So finally it seems the flaring may happen along religious lines. Neither currency nor natural resource can possibly become the trigger.

The first light may come from terror, which is divided and conflicted around religion. So it is back to the clash of civilisations, or to be unfair to Samuel Huntington, the clash of civilisations versus cultures, or merely the clash.

Alam Srinivas

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