Ian Bremmer is one of the foremost geopolitical analysts of our time. He is founder and president of Eurasia Group, a geopolitical risk and consulting firm based in New York. Bremmer has authored several books, including national best-sellers "The End of the Free Market: Who Wins the War Between States and Corporations" and "Every Nation for Itself: Winners and Losers in a G-Zero World." He is a global research professor at New York University. He is a frequent contributor to publications like Reuters, The New York Times and The Wall Street Journal, and is a regular on CNBC, Bloomberg TV, Fox News Channel and CNN.
Bremmer recently sat down with ETF.com to discuss the escalation in West-Russia tensions in the aftermath of the Malaysian Airlines missile strike. He gives us his take on Modi's and Jokowi's election wins in India and Indonesia, respectively. Bremmer also sheds light on which regions and countries are most sheltered from the current geopolitical tensions.
ETF.com: How will the missile strike on Malaysian Airlines MH-17 over separatist-held territory in Ukraine play out? Will it lead to a ceasefire, or a further escalation in West-Russia tensions?
Ian Bremmer: If it does lead to a ceasefire, it won't hold. You've seen that there are two more Ukrainian fighter jets that went down this morning [7/23/14]. Kiev is, of course, blaming the Russian government and saying the missiles came from Russia. The Russians are saying it came from the separatists. It shouldn't matter since, if the Russian separatists shot them down, those weapons were given to them by the Russians. A lot of the separatists came over from Russia. Nonetheless, it does matter, because it allows the West to more easily deny needing to get involved.
There's an enormous amount of criticism that's coming from the United States, the Europeans, Canadians and Australians, but there's not a lot of desire to really escalate, because everyone has come to the conclusion that escalating in a serious way is not going to accomplish anything. They're right.
What's astonishing about this entire thing is we just had a plane go down. Three hundred people dead, civilians—mostly Europeans—and it hasn't actually really changed anything on the ground. The Americans are still pushing towards Level 3 sanctions. They were doing that before. The Europeans are absolutely a little more supportive of the U.S., some of them at least—certainly the Brits and the Germans and absolutely the Dutch—but not the Italians, not the Spanish and not the French.
The Chinese, if anything, are closer to the Russians today than they were before the incident. You can see that with the Chinese state media reaction, which took the Russian propaganda at face value. They see some commercial utility in doing that. The Russians were on the defensive in the immediate aftermath of the plane being shot down. I think now they're right back on their previous strategy.
The Ukrainians are still saying, "These guys need to go. We're not any closer to getting the gas dispute resolved. We're not any closer to having the violence soften or ease in Ukraine." So no, it's probably hastened the timing of escalation of the crisis somewhat. We were going to get to this point anyway. Aside from that, it hasn't had much impact.
ETF.com: Do you see the EU rallying behind the U.S. to impose stricter sanctions on Russia?
Bremmer: This crisis will make the Europeans more likely to take a tougher line. But they will still be easily a couple steps back behind the Americans at all points, in part because even the toughest of the Europeans have much more exposure economically to the Russians than the Americans do. Secondly, the ability to coordinate foreign policy in Europe is incredibly difficult, and very slow and inefficient.
ETF.com: So you don't see this event causing any more damage to European economies than it would have before the incident?
Bremmer: We thought that the damage to the European economies was going to be severe. We were much more concerned about that than the folks on the street were, most of whom don't really pay attention to geopolitics. If anything, market consensus has now moved closer to our position. But again, this hasn't really actually changed that much.
In historical context, if there's anything that's surprising here, it's how little additional response there is, how little change, despite the fact that we've just seen a plane shot down—not intentionally, but nonetheless shot down, very clearly, by separatists on the ground in Southeast Ukraine, who have been supported consistently by Russia.