Jun 9 2009

A tight race for Iran's contentious presidential elections

Global Power Barometer (GPB): What is your impression of the 2009 Iranian presidential race so far?



Dr. Kaveh Afrasiabi: This Friday, June 12, will be a special moment in the history of Islamic Republic whose legitimacy as well as its international standing will benefit by allowing a highly competitive race featuring multiple candidates vying for a share of Iran's 46 million eligible voters.

The whole country has been riveted by the electrifying euphoria of a democratic implosion that is somewhat reminiscent of the early days of Islamic revolution. Irrespective of the final outcome -- and there is a distinct possibility of a run-off due to the strong challenges to the incumbent president Ahmadinejad by the three "establishment" candidates. This election is noteworthy for its qualitative expansion of political society reflected in the surge of democratization that, in all likelihood, will not recede after the elections. The current regime's consolidation and growing self-confidence are major factors for this unprecedented "deliberative democracy"(1) in Iran. The debate is dominated by polarizing discourses and intense acrimony, thanks in part to the 6 nationally-televised debates among the four candidates, Mir Hossein Mousavi, a former prime minister, Mehdi Karoubi, a liberal clergy, Mohsen Rezaee, a former commander of revolutionary guards, and president Ahmadinejad, who continues to enjoy the confidence of Iran's supreme leader, Ayatollah Khamenei.

The TV debates, forbidden in the past 9 elections, as well as TV commercials, mass rallies and the like, have played a decisive role in galvanizing public attention. They have even sharpened the political cleavages, with both intended and unintended results that will likely transcend the presidential race and deepen the democratic rampart of Iran's part theocratic, part republican system. In a sense, we are witnessing the coming of age of Islamic Republic, its increased recourse to the modern trappings of democracy reflecting an evolutionary process that is very promising despite the various flaws of the electoral system, including inadequate time for campaigning and arbitrary exclusions; the revision of outdated elections laws is long overdue.

GPB: What do you think turnout will be?

Afrasiabi: Of course, voter turnout is key and based on what we have already witnessed in the streets of Iran and at political gatherings, it is fairly certain there will be a higher turnout than the last election's 60 percent of the electorate. My guess is it will be around 80 percent, partly because of the unique mobilization of various social strata, women, students, and ethnic minorities.

GPB: What are the strengths and weaknesses of each candidate including president Ahmadinejad?



Afrasiabi: Ahmadinejad's main weakness is that he faces three opponents who can split the votes and thus deny him a first round victory - that requires a minimum 50 percent of the votes. His other weakness is caused by the strength of his reformist opponents, Mousavi and Karoubi, who together represent a bold re-emergence of the reform movement, which was dealt a severe blow in the previous presidential and parliamentary races. Having recuperated with zeal and energy, the "return" of Islamist liberal democratic politics in Iran may be the most salient feature of this election. Mousavi and Karoubi both have a strong appeal to the disgruntled voters who question the president's economic, social, and some of his foreign policies. Also, mention must be made of the changing international environment spearheaded by Obama's presidency, that has led some Iranians to the conclusion that Ahmadinejad was a necessary antidote to the "axis of evil" Bush but who may no longer be appropriate today. This is why the reformist candidates are painting the incumbent president as "adventurist" and "extremist." Though an effective argument on the international scene, I doubt, however, that this resonates much with Ahmadinejad's populist mass constituency, which happens to be more socially conservative and militant with respect to foreign policy issues and, I hasten to add, has also benefited from his economic populism.

With respect to Mousavi, his main weakness is a long absence from government affairs. He is inward looking and has an overly rationalist approach not backed by a detailed program. Yet, his Khatami-style championing of d'tente with the West, prioritizing national interests by de-ideologizing Iran's foreign policy, and his emphasis on personal liberties and rule of law may translate into substantial votes.  However, chances are he will fall short of dislodging a "national-security minded" president who is an answer to the post 9/11 securitization of Iran's external environment as a result of US' interventionism.

GPB: Who do you think will win?



Afrasiabi: In the absence of reliable polls in Iran and all the signs of a very tight race, it is difficult to predict. My guess is that there will be no clear winner the first round and the top two candidates in the run-off will be Ahmadinejad and Mousavi. If Ahmadinejad's bid for re-election fails, this would be partly due to the lack of a coherent campaign strategy and multiple tactical errors on his part. For example, he has made raucous attacks on some ruling elite personalities, accusing them of corruption and nepotism. These attacks mostly have backfired with some of Ahmadinejad's own supporters such as the "principalist" women, the Islamic Society of Engineers, and the Coalition of Forces of Imam's Line.

With timely adjustments, Ahmadinejad may be able to survive his self-inflicted wounds, particularly given the numerous advantages of incumbency and his ability to fend off some criticisms over the economy and foreign affairs. After all, despite 15 percent unemployment and 24 percent inflation, Iran has a growing economy today and is certainly not in recession. Add to this the fact that Ahmadinejad has taken credit for making major strides in Iran's nuclear program, which is a source of national pride.

GPB: What would be the effect of a truly competitive election on a second term for Ahmadinejad?

Arasiabi: His second term will be deeply impacted by the tumultuous race. We are likely to see a more moderate Ahmadinejad but regardless of who wins, it will be tough to negotiate the nuclear standoff because of the open elections bestowing legitimacy on the current regime.

(1) For more on this see, Afrasiabi, "Problems of deliberative democracy in Iran": http://www.payvand.com/news/01/may/1037.html

Afrasiabi has taught political science at Tehran University, Boston University, and Bentley College. Afrasiabi has been a visiting scholar at Harvard University, UC Berkeley, Binghamton University, Center For Strategic Research, Tehran and Institute For Strategic Studies in Paris. Afrasiabi has written several books in relation to Iranian foreign policy and Iran ? United States relations, including After Khomeini: New Directions in Iran's Foreign Policy (1994), Nir/North: A Cinematic Story about the Iran-Contra Affair (1996), Iran's Nuclear Program: Debating Facts Versus Fiction (2006)and Reading in Iran's Foreign Policy After September 11 (2008). ..

May 18 2009

The Obama Administration: No signs yet of an effective nuclear non-proliferation strategy.

GPB: The third preparatory meeting for the 2010 Review Conference of the Non-Proliferation Treaty (NPT) was held at the UN headquarters in New York from May 4 through May 15. The Global Power Barometer spoke with Dr. Kaveh Afrasiabi, a global affairs specialist and frequent contributor to the GPB, who attended the NPT meeting and its side panels as an observer.

GPB: Did this meeting successfully set the stage for the 2010 Review Conference?

Dr. Afrasiabi: It was a semi-successful/semi-failed event, which is unfortunate since it took place in a new and largely optimistic environment, resulting from the "Obama factor" and the new engagement of Russia and United States on NPT issues.

Within three days, the delegates from the 86 NPT states managed to pass a resolution that set the agenda for the 2010 Review conference, thus clearing the procedural issues such as selecting a chair of the upcoming conference.

Delegates were were also concerned about the 2010 Review Conference given the dismal failure of the 2005 NPT Review Conference. Despite sharp differences - that ultimately prevented the adoption of a consensus report on substantive recommendations to the 2010 Review Conference - delegates worked hard to make sure 2010 would not repeat the failure of 2005.

Although the chair of this conference, Ambassador Chidyausiku of Zimbabwe, blamed failure of the meeting to set initial recommendations on inadequate time, I doubt that more time would have helped...the differences were just too big. This raises multiple red flags for next year's review conference and suggests that the policy cleavages that sank a final report could similarly frustrate the 2010 conference.

GPB: Elaborate on what the main disputes were.

Afrasiabi: First, you had the traditional divisions between the cluster of nations whose chief concern was disarmament versus those who believe non-proliferation is key. This is the difference essentially between the haves and have-nots.

Second, the draft recommendations to the Review Conference that did surface failed to explicitly mention (and endorse) the "13 practical steps" toward disarmament, a major achievement of the 2000 Review Conference. These 13 steps are critical to non-nuclear nations who see the nuclear nations keeping their weapons advantage at the expense of the vast majority of nations in the world. The second draft of the recommendations, rather than attempting to address this omission, overemphasized non-proliferation in a way that was seen to be more of the same longtime effort by Western nations to maintain their nuclear advantage rather than addressing the security concerns of non-nuclear nations. A number of delegates from the Non-Aligned Movement privately told me that they thought the "nuclear club" nations were trying to discretely reverse previous gains on disarmament.

In addition, a number of issue clusters surfaced: Nuclear readiness and sharing, transparency, enhanced verification regimes, and outlawing the use of nuclear weapons, etc.

In a post-Bush world, where US influence has been weakened and regional powers, such as Iran, have grown in political strength, simply maintaining the Western policies of the past 60 years is not realistic. As the non-nuclear nations have seen their influence grow, ignoring their concerns makes it literally impossible to achieve consensus.

As a result, even within the camp of nuclear weapons states (NWS) there is considerable disagreement. For instance, China has exhorted the other NWS to emulate its model of a "negative security guarantee" that pledges no use or threat of use of nuclear weapons against non-nuclear states (or, alternatively, a nuclear weapons free zone). So far, China is the only NWS to endorse such an approach. One can only hope that the Obama administration that is currently reviewing the US nuclear posture would heed the Chinese call to revise its nuclear deterrent strategy.

As hinted by the International Atomic Energy Agency chief, Mohammad ElBaradei, failure to do so would only fuel the proliferation tendencies around the globe as, failing disarmament, more and more countries seek security through nuclear weapons just as the NWS member states of NPT have done. This year's NPT preparatory meeting was dominated by complaints of double standards, unfairness, "injustice" and lack of balance between the three NPT pillars (i.e., disarmament, non-proliferation and peaceful use); naturally, we should expect to hear more of the same next year.

GPB: How do you assess US role and input at this conference?

Afrasiabi: The US sent a decent team headed by the Assistant Secretary of State Rose Gottemoeller, who read a brief message from president Obama reiterating his commitment to reach deeper cuts in the nuclear arsenals of the US and Russia, who together comprise some 95 percent of world's nuclear weapons. She also partially committed the US to work to bring India, Pakistan, and Israel within the NPT umbrella.

Having somewhat raised expectations, the US must now deliver on its promises before the April 2010 Review Conference. Can the US create the political will to make real changes? Unfortunately, chances are that the Obama Administration will achieve no more than the Clinton Administration (the Bush Administration actually went backwards on non-proliferation). Instead of a new START treaty when the current treaty runs out in December, the existing one will likely be extended and no discernible movement on test ban treaty or a fissile material cut-off treaty. Movement on these issues could occur before next year's conference. Progress could be made in the present crises over North Korea's proliferation and Iran's nuclear program. If nothing occurs, which will probably be the case, next year's NPT review conference will likely fail and it will be a free-for-all among non-nuclear nations to secure nuclear weapons.

GPB: Finally, do you have any suggestion for the Obama administration?

Afrasiabi: I think the White House is not on the wrong track, but it needs to remain consistent and steadfast on its public announcements, as well as to show far greater leadership in such areas as an international fuel bank, negative security guarantee, and a Middle East nuclear weapons-free zone.

I am skeptical over any near-term tangible progress on the test ban treaty or a fissile material cut-off treaty, but the US can do a lot more by taking concrete baby steps toward disarmament. For example, it could lean on allies such as France and England, as well as on NATO, to revise their nuclear doctrines.

Too much attention on the big picture of NPT without the benefit of a multiplicity of "confidence-building" micro-steps may, however, be the Obama Administration's biggest flaw at the moment. The 2009 preparatory conference vividly demonstrated the world's perception of organic linkages between lack of disarmament and the threats about nuclear proliferation. This in turn calls for an alternative communicative nuclear diplomacy on the part of US that does not recycle the past behavior and respects the balance between the rights and obligations that arise from the NPT. That means even greater US sensitivity to the opinions of non-nuclear weapons states, who are rising in power and influence, and whose views must be addressed if a consensus on NPT is ever to be reached...

May 13 2009

Is a more balanced Middle East policy ahead under the Obama Administration?

Numerous but under-the-radar stories have appeared these past weeks about mysterious indirect negotiations between American and Iranian officials regarding Tehran's nuclear program. The Iranian nuclear program is worrisome to most western powers not because it would provide Iran with an alternative power source, but because if Tehran were to convert its civilian-level nuclear capabilities and enrich uranium to weapons-grade quality, it could build nuclear weapons. This in turn would change the entire balance of power in the Middle East, which is currently dominated by only one (unofficial) nuclear power: Israel.

Over the Bush years, Iran became the rising Middle East power, challenging Arab nations for leadership in the Persian Gulf and other critical parts of the region. For evidence, look no farther than Iran's support for Hezbollah and Hamas, its close ties with Syria, its commandeering and confusing relationships with Gulf States, its participation in Caspian politics, its perseverance in creating a gas cartel with Russia and Qatar, its development of the India-Pakistan-Iran Pipeline, and its contradictory dealings with internal Afghan affairs. While neither a Shite-led nation, Iran has become a beacon of hope for many in the Sunni-Arab street. Iran also can be admired for its relatively developed democracy (in comparison with many of its neighbors), its emphasis on women's education, and a high literacy rate. Iran is clearly rising, and that is certainly cause for worry among those concerned with a regional status quo.

Of course, the most worried party in the whole intricate web is Israel. In the eyes of many, particularly US supporters, a nuclear Iran would mean an "existential threat" to Israel. However, a report released May 12 by Israeli military authorities says that Iran currently poses "a substantial but not existential threat" until it puts nuclear warheads on its advanced missile technology. See Today's Israel Articles. Many Israeli leaders have issued repeated and continued threats against Iran, saying that it would perform preemptive strikes on any Iranian nuclear facility with or without US approval. Israeli fighter jets have been seen as far as Gibraltar (the distance from Israel to Gibraltar is roughly the same distance as Israel to Tehran), and Israeli Foreign Minister Avigdor Lieberman and Prime Minister Binyamin Netanyahu have been particularly clear in expressing their hawkish views.

Given the US' new and more balanced stance on Israel (as evidenced by Vice-President Joe Biden's statements at the AIPAC summit in Washington last week calling for no exceptions to a two-state solution including the dismantling of West Bank settlements), some predict a growing clash between Israel and Washington. Foreign Minister Lieberman, who has been appointed as leader for strategic dialogue with this US and is well known for his stance on Israeli nationalism, stated last week: "For us it is important to underline that the greatest problem at the moment in the Middle East is Iran; an Iran that is becoming nuclear and is becoming, or has already become, a destabilizing factor for the entire world."  PM Netanyahu, coming to Washington this week to sit down with US President Barack Obama, also visited Egypt, reportedly, among other issues, in an attempt to win Cairo's support against Iran and its nuclear ambitions.

Indeed, it is the nuclear issue, much more than the elusive topic of Palestinian statehood, that has appeared to be most controversial between Israel, the US and Iran. And the issue took a new turn last week when US Assistant Secretary of State and nuclear negotiator Rose Gottemoeller stated at the UN that all nations must abide by the Non-Proliferation Treaty (NPT), including Israel, India, Pakistan and North Korea, which have not signed the agreement. The NPT is one of the few international documents that seek to curtail the limits of nuclear technology and prevent the spread of nuclear arms. For various reasons, largely due to diplomatic immunity provided by the US and its allies, Israel, India and Pakistan have become nuclear weapons states without signing the NPT. As the UN meets to revamp the NPT, it only makes sense that some nations should call for complete international adherence to the treaty. However, it was unexpected that the US would lead the call, especially against its staunch ally Israel.

So what's going on? Some analysts suggest that the hardened stance by the US against Israel is part of a strategic plan by the Obama Administration to placate Iran to a certain degree so that it can enter into talks regarding Tehran's nuclear program. Given the Obama Administration's attempts to create venues to meet with Iranian diplomats (such as at the Shanghai Cooperation Organization summit in Moscow, a UN meeting on Afghanistan at The Hague, or a G8 summit on Afghanistan/Pakistan), this argument holds water. What is curious, however, is that it is not US but largely Israeli media sources that are covering developments as they relate to US-Iran interactions. For example, on Sunday, it was revealed the US reportedly sent a letter to Iranian negotiator Said Jalili that set an October deadline for a first round of Iranian nuclear talks. The story was broken by the Israeli paper Ha'aretz, which relied on "a political source in Jerusalem" for its information. Iran quickly denied the allegation that it had received any letter giving a deadline, and the story then dissipated in the media, barely mentioned in the North American press.

Other articles related to Iran have had their first appearance in the English language in the Israeli press as well. On Tuesday, a story coming from Saudi Arabia's Arabic language paper Al-Watan was translated first into English by Israel's Ynetnews. The story explains that Iran deployed several mobile surface-to-air and anti-ship missile batteries to locations on the Persian Gulf in anticipation of a joint Israeli-US aerial attack on its nuclear facilities. Al-Watan's source is a "high-ranking Iranian official."

There are several potential explanations for these stories about Iran's nuclear program being broken first by Israeli media. Some of the most credible hypotheses are these

• Journalistic rigor. Israeli reporters are inherently interested in Iran, and Israeli readers want to read about any potential threat to their state.
• Governmental meddling. One cannot help but construct a theory surrounding these reports coming from the Israeli media. Might certain politicians in Jerusalem be seeking to drive their own agendas by leaking top-secret stories to certain Israeli reporters?
• A "grand bargain". Iran is a rising regional power, like it or not. The Obama administration is doing its best to adapt to this inevitable reality that could very well include an Iran with nuclear weapons. These media leaks through Israeli sources could point to backchannel negotiations between Washington and Tehran that constitute part of the fabled "grand bargain" which could lead Iran, the US, and many other powers to a new and supposedly equitable playing field.

Apr 20 2009

China's back door to shredding the Monroe Doctrine

China, while struggling with more than 20 million unemployed and a decimated manufacturing sector, is not wasting the global financial meltdown. Rather, China looking at a brighter future is making financial deals and providing billions in foreign investment and aid designed to dramatically increase its influence in the back yard of the United States.

While charismatic US President Barack Obama was the center of attention at the 5th Summit of the Americas in Port of Spain, Trinidad and Tobago, China was the outsider with money. As Simon Romero and Alexei Barrionuevo reported in The York Times April 16, China has been using its nearly US$2 trillion in foreign reserves to "double a development fund in Venezuela to US$12 billion, lend Ecuador at least US$1 billion to build a hydroelectric plant, provide Argentina with access to more than US$10 billion in Chinese currency and lend Brazil's national oil company US$10 billion."

It's no mistake that China is seeking access to everything from soybeans to iron ore to oil most likely as Romero and Barrionuevo point out as an alternative to investing in US Treasuries. Indeed, in February, China boosted its treasury holdings by the smallest amount in a year.

According to the Times, Dante Sica, senior economist at Abeceb, a leading Buenos Aires consulting firm, attributed the opening for increased Chinese influence to the "lack of attention that the United States showed to Latin America during the entire Bush administration." But it's more than that...it's also attitude.

This weekend, Howard LaFranchi writing in the Christian Science Monitor discussed a number of reasons for China grabbing waning US influence south of the US border. He explains that the combination of Bush's War on Terror and nation building overseas naturally opened a door for Latin American business and political leaders to seek partnership elsewhere, mainly with Chinese and Russian companies and officials. (See Today's US Articles)

Russia on the one hand sought influence with all the subtlety of a bull in the proverbial "China shop", focusing on military alliances with countries like Venezuela and Cuba. China on the other hand has exercised a surgeon's skill in extending its "Africa model"...that is offering money with no questions asked and gaining a Chinese foothold directly in the economies of other nations (that's Chinese controlled businesses running key infrastructure projects). In other words, China is seeking as it has in Africa to create economic power and control directly within these nations.

Why is Beijing making such a series of high investment at this era of financial crisis? Not only does China know that the time is ripe to increase its geostrategic influence, it also is keenly aware of its own weaknesses. (See Today's China Articles). These include not just natural resources like oil and metals. They also include food. Analysts point to China's imports of soybeans from Brazil as evidence of China's growing food crisis. As Alan Pasternack points out in the Huffington Post, "As China suffers through prolonged drought, the soy imports mask another import. As Richard Vogel, an ecological engineer said at a recent New York Times Institute conference I attended, 'China's soybean imports from Brazil are really water imports.'"

As China builds influence over Latin America it does not hesitate to use its influence on more than the economic sphere.  China is carefully using its economic influence to change minds about Taiwan. Over the past several years, nations traditionally aligned with US-backed Taiwan, such as Costa Rica, have switched their allegiances, closing diplomatic missions with Taipei and reassigning their staff to Beijing.

China's influence was stated most clearly by Venezuelan President Hugo Chavez on April 7 when he paid a visit to Chinese President Hu Jintao in Beijing. After a meeting devoted in large part to expanding Venezuelan oil exports to China (currently exports are at 380,000 barrels/day and Chavez wishes to expand them to 1 million/day within 4 years), Chavez announced: "No one can be ignorant that the centre of gravity of the world has moved to Beijing." These are quite strong words even for Chavez, who has buttered up Iran and Russia as well.

Not everyone is happy with China's growing influence. Nations and analysts who have looked carefully at the China/African experience have found much of the benefit of Chinese aid and investment remains under the control of the Chinese, flowing primarily to Chinese employees imported to run economic enterprises rather than local populations. Additionally, while the political leadership may benefit from Chinese investment, much more flows back to China than benefits the people of host nations.

So what is the US to do given some believe the center of the world is now Beijing? Is it the Newt Gingrich view that Obama is a Jimmy Carter for not coming down heavy on our neighbors to the south (as if the US could after eight years of the Bush Administration)? Should the US somehow seek to regain its hegemony over Latin America, even when some global thought leaders have alleged that the American empire is in "foreclosure"?

No. Clearly, the days of US dominance south of its border are over. President Obama's perceived success this weekend in Trinidad and Tobago is in part because of his willingness to adapt to this new global reality. His deference to fellow leaders of the Americas and his focus on discussion and listening clearly caught off guard the most vociferous anti-US leaders at the current summit. They would obviously much prefer the Bush/Cheney approach in which there was a common enemy in the United States. They don't know how to handle this American leader who doesn't look like the typical historical example from Washington and who talks with Latin and South American leaders, instead of talking to them. Interestingly, Ayman al-Zawahiri, Osama bin Laden's No 2 is having the same problem with President Obama. He recently called for the world not to be "fooled" by President Obama who appears to listen rather than lecture.

The GPB first reported China's foray into the US backyard more than 18 months ago...at that time we warned that China was cleverly shredding the Monroe Doctrine which has been a statement of US policy since 1823.

However, the African/South American strategy of China has in many ways proven heavy handed and unbalanced. If President Obama can carefully (and it will take time) woo mainstream South America back into the US camp by persuasion and economic partnership, he has a decent chance of beating China at its own game here in the Americas and showing that strength comes from more than just arrogance.

..

Apr 4 2009

While this week saw the rhetorical end of the "Global War on Terror," it also witnessed increased media coverage of an aspect of Islamist activity in a corner of the globe where Operation Enduring Freedom has received far less attention, Southeast Asia. Far from signaling a resurgence in terrorist action, however, the recent kidnappings in the Philippines indicate the waning influence of Abu Sayyaf and other extremist groups in the region.

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On Thursday the terrorist group, Abu Sayyaf, released one of the three Red Cross workers being held hostage on the island of Jolo in the southern Philippines. Tuesday had seen the deadline for the beheading of one captive come and go without event. Philippine marines advanced on the terrorist position despite calls from international organizations that they pull back from their positions in the Sulu archipelago in compliance with the kidnappers' demands.

It has been over 11 weeks since the three Red Cross workers were abducted. Media coverage of Abu Sayyaf demands has provided extensive exposure for the group, and mistakenly characterizes the organization as negotiating from a leveraged position. This is far from the case. If one looks at the history of terrorist organizations in the Philippines, it's apparent that recent actions indicate the relative success of the Philippine Government's campaign against Abu Sayyaf and related groups.

Kidnappings for ransom, or KFRs in military parlance, are not a new invention in the southern archipelago of the Philippines. In 2001 Abu Sayyaf abducted 20 people, including three Americans. Government forces were able to kill or capture all of the kidnappers, though one American was beheaded and another was killed in the rescue attempt. There is no doubting the dangerous nature of these groups and the threats the remaining hostages face.

The extensive media coverage over the past weeks, much of it critical of the government's assertive actions, has served to raise the profile of the kidnappings, aiding the terrorists' information operations campaign by bolstering its image at a time when its influence in the Sulu archipelago has diminished greatly.

In the 1980s and early 1990s, agreements with the Moro National Liberation Front restricted the reach of the government's armed forces to the primarily Christian town of Jolo City. Abu Sayyaf gained significant strength in the 1990s until an increase in kidnappings compelled further action on the part of the Phillipine Marines. Recently, however, the trip to Jolo finds roads newly secured from terrorist activities, and the provincial government is increasingly taking a role in the daily lives of local citizens.

Government gains over the past few years have been significant and not limited to security improvements. With the guidance and support of the US Military and USAID, the Philippine Government and its armed forces have conducted a classic counterinsurgency campaign, taking a population-centric approach with limited direct combat action and an emphasis on development and good governance.

Improvements in security and the political situation can be tied directly to government-sponsored projects, whereas prior action had included battalion sweeps that alienated the populace. Running up the body count often can lose the support of the local population. In this densely interwoven clan-based society of the southern archipelago, trust is difficult to win. Collateral damage in the form of innocent lives lost is not an easy wrong to right.

KFRs are a targeted weapon in the information campaign of Abu Sayyaf and other terror groups; more importantly, however, they signify the dire straits in which many of these organizations find themselves. Abu Sayyaf, Jemaah Islamiyah and other associated groups turn to kidnappings as a last resort after their revenue lines - many with Saudi ties - have dried up. Kidnappings are a far cheaper way to obtain revenue and public attention as recruitment numbers decline and their freedom of action grows more limited.

Over the past several years, one can draw parallels between the increase in kidnappings that follow periods of government success; when Abu Sayyaf enjoys freedom of action in the abscense of a persistent government approach, the result has been a series of larger, more deadly terrorist attacks, like the bombing of the Superferry in 2004 that took more than 120 lives.

Last fall, Major General Juancho Sabban, the commander of the Phillipine Marines' operations on Jolo, noted, "The main reason we are now winning in that area is because of the shift in strategy. We conduct civil-military operations, we address poverty - We have to educate people to change their mindset, to show the younger generation what is right and wrong. They see their parents kidnap foreigners, so they think it's a local activity. If there are other opportunites, it doesn't have to be."

In the immediate term, the utmost care must be applied to the safe rescue of the remaining two Red Cross captives. In the longer term, however, similar kidnappings ought not to be seen as reflecting good terrorist propaganda, but rather should be inidicative of the dire financial sitatuions in which many of these transnational terror organizations find themselves. Much of the Moro Islamic fighters' activities have been reduced from terrorism to criminal activity. By continuing to focus on the corruption and social inequality, the counterterror efforts in the Philippines stand to consolidate recent gains.

The southern archipelago of the Philippines has come a long way since the late 1990s when Abu Sayyaf, Jemaah Islamiyah and other al Qaeda-linked groups fostered dreams of establishing the caliphate by starting with the islands of Basilan, Sulu, Tawi Tawi and Mindanao. The latest kidnappings are more indicative of a desperate gasp than a viable future for the Islamists in the region.

Richard Bennet is a research associate in national security studies at the Council on Foreign Relations. ..

Mar 29 2009

In both cases, the question is "What's the right balance?"

The economic program...not there yet.

Wall Street loved the initial details of the banking rescue plan with the DOW rising nearly 500 points the day it was announced. But most progressive economists felt the reason Wall Street loved is that it just prolonged the status quo, with taxpayers taking the risk and Wall Street getting the benefits.

Paul Krugman, writing March 23 in the New York Times summed up the view, "it fills me with despair." The main problem Krugman wrote is that the financial bailout plan "assumes that banks are fundamentally sound and that bankers know what they"re doing." At the GPB, we,ve been waiting to see if President Obama is really a decent strategist, able to understand multiple topics and react in ways that show he's the out-of-box thinker demanded by today's monumental challenges rather than simply a referee among competing policy wonks.

Reporting in the Monday (March 23) Huffington Post, Arianna Huffington told of a "spirited battle" between Treasury Secretary Geithner and David Axelrod, President Obama's chief strategist. Axelrod felt the plan needed to include strict conditions on taxpayer money including pay and bonus constraint. Geithner didn't. Obama unfortunately listened to Geithner not Axelrod. Huffington suggested that decision is going to "cost the young Obama administration a lot."

Perpetuating the system that has grown up since the Reagan years simply uses taxpayer dollars to guarantee that after billions spent, there will more greed crises as there have been throughout the 80's, 90's and 2000's. As Time pointed out in last week's cover story on AIG, a stable insurance company let absurdly compensated gamblers led by Joseph Cassano "double down" ensuring a "systemic" risk (poison to insurance companies who should rely on diversity and spread of risk to safeguard their capital and stability).

But Mr. Cassano, who Time reports was compensated to the tune of $280 million as he took AIG down and threatened the global economy, was simply a product of years of allowing greed, "creativity" and banking to mix...a deadly economic cocktail.

The GPB forecast the financial crisis beginning more than 2 years ago by tracking 12 "bubble patterns" that were aligning to form a perfect storm to the 5th power. They were not hard patterns to spot, indeed as many people did...and wrote about. Two years ago they likely (though not certainly) would have been manageable by a simply though politically difficult regulatory overhaul, saving trillions of taxpayer dollars and millions of jobs.

Today, though injecting liquidity now is required, the fundamental fix is still regulatory. First, the Federal government needs to downsize the banking and other financial industries (e.g., insurance), to break up in an orderly manner all those that are "too big to fail". Then, anit-trust laws need to be much more strictly enforced to prevent consolidation that again creates "too big to fail" institutions.

Second, the key element of the Glass-Steagall Act of 1933, which prohibited banks from owning more risky financial services companies and was repealed in 1999, needs to be reinstituted so that banks are again restricted to two missions...safeguarding depositors' money and providing the credit so desperately needed by the economy.

Third, the entire financial sector needs to be made far more transparent, hedge funds in particular, so that current Bernie Madoffs (there appear to be others) are exposed and future Madoffs avoided.

While Treasury Secretary Geithner at the end of the week was talking enhanced regulation, on March 29 talk shows, he showed few signs of moving past his Wall Street upbringing to make the tough and unpopular (among his Wall Street friends at least) decisions that will again protect America's economy from incompetents and crooks. President Obama has not yet showed, at least on the economy, the independent strategy skills to make proper decisions.

Obama's Drones: A risky new Afghanistan strategy

Since the summer of 2008, the US Military has been performing cross border raids from Afghanistan into Pakistan with the goal of eliminating key al-Qaeda and Taliban operatives that sneak into Afghan territory to fight US, NATO and Afghan forces. The Pakistan-Afghanistan border is treacherous, mountainous and porous, but it does not prevent this territorial transcendence by Islamist militants, both native and foreign.

In theory, the US strategy...a carry over from the "Bush Doctrine" is a good one: By using unmanned drones to perform targeted strikes on leaders, casualties can be kept to a minimum while the insurgency is weakened. However, there are three key drawbacks:

• Legal: Performing raids on Pakistani territory is a clear violation of Pakistan's sovereignty as a nation. Islamabad has never formally permitted the raids and has repeatedly spoken out against them.
• Practical: Cross-border raids have forced the Taliban away from the traditional strongholds in the Northwest Frontier Province (NWFP) and Federally-Administered Tribal Areas (FATA), and towards more heavily populated and modern areas such as Quetta in Baluchistan or the Swat Valley. It has also allowed the Taliban to gain control of vast areas of Pakistan (Swat Valley), employ urban guerilla tactics (kidnapping in Quetta) while uniting disparate factions into a stronger Pakistani Taliban. This group has vowed to match the incoming 17,000 US troops in Afghanistan with increased vigor.
• Existential: The cross-border raids undermine Pakistani influence in its own territory, highlighting the impotence of the government of President Asif Ali Zardari and Prime Minister Yusuf Raza Gilani. This is added to the forced reinstatement of Chief Justice Muhammad Iftikhar Choudhry, which highlighted the powerlessness of the Zardari government.

Mar 14 2009

Iran and the US...critical partners in an Afghanistan solution

GPB: US Secretary of State Hillary Clinton has extended an invitation to Iran to take part in a multilateral conference on Afghanistan. Will Iran attend?

Afrasiabi: Iran has yet to receive a formal invitation but my hunch is that despite misgivings about US motives, Tehran will participate in the Afghan United Nations conference, primarily because it's in Tehran's interests to stabilize its troubled neighbor. Tehran has already accepted an invitation by Italy's president, serving as the G8 president, to take part in a G8 summit on Afghanistan. This June event is focused on securing the borders of Afghanistan and Pakistan and preventing "conflict spillover" into neighboring countries. I hasten to add, however, that unless the overall climate between Tehran and Washington continues to improve, there is little chance of the conference producing even a mini-breakthrough in US-Iran relations on regional issues like Afghanistan and Iraq. The US conference diplomacy must proceed in tandem with confidence-building steps. Unfortunately, the White House has to date sent mixed messages to Tehran, on the one hand making symbolic overtures and on the other renewing sanctions and, worse, using incendiary language in statements to Congress while omitting mention of the significant convergence of interests between the two countries on regional issues. As a result, there is a possibility Iran may refuse to participate or participate with its political hands tied by the Obama Administration's position...and that means very little will be accomplished.

A prudent alternative is for the Obama administration to refrain from anti-Iran rhetoric, combining open and secret diplomacy to push ahead using a comprehensive and integrated approach, separating single issues of common interest and integrating successes into more contentious issues as trust is built. Still fresh in the minds of Iranian leaders is the Bush Administration's fiasco in Afghanistan after September 11, when Washington rewarded Iran's constructive engagement (which could have changed the course Afghanistan long term) by labeling it as part of an "axis of evil".

GPB: How does Tehran view the situation in Afghanistan today?

Afrasiabi: We need to be clear that Iran is not a Taliban/al-Qaeda supporter. Tehran is obviously alarmed by the deteriorating security situation on its western border and is troubled by the Taliban's and to a lesser extent al-Qaeda's successes in many parts of Afghanistan. Iran also is concerned as is the US about their protected enclaves within Pakistan. Iran's leaders have been vocal in their criticisms of "misguided" US/NATO strategies that have brought Afghanistan close to the brink of failure. Seeing the linkages between Afghanistan and Pakistan, Iran is now working overtime to pursue a trilateral security initiative with these two countries. This effort is in part to contain the Taliban and partly to stem the burgeoning drug trade that sends drugs to Iran through Afghanistan and Pakistan. At the same time, Iran is keen on improving the Afghan economy (hence security) by giving generous economic assistance to Kabul, enhancing bilateral trade (which stood at close to $1 billion in 2008), and proceeding with plans to improve transportation links to Afghanistan. Iran is also working with Afghanistan's neighbors to improve the Afghan economy by, for example, creating programs for importing water and electricity from Tajikistan to Afghanistan.

GPB: Iran and Pakistan appear to be closing their gaps with respect to Afghanistan.  Do you agree?

Afrasiabi: Absolutely. The recent Economic Cooperation Organization (ECO) summit in Tehran, that brought together the leaders of regional states including Afghanistan and Pakistan, was an opportunity for Tehran and Islamabad to try out their growing cooperation on bilateral and other issues. Pakistan is keen on seeing the implementation of the Iran-Pakistan-India (IPI) gas pipeline with or without India's participation. Of course, Iran and Pakistan are still not fully on the same page. Tehran (and for that matter the US) believes Pakistan sees Afghanistan partly as a theater of competition with India.

GPB: What can we be expected in terms of Iran's aid to Afghanistan?

Afrasiabi: I believe Iran as a result of its geographical proximity and close historical, cultural, and linguistic ties to Afghanistan is destined to play an increasingly important role in Afghanistan's stabilization. Economically, we can expect a sharp increase in the scope and volume of Iran's assistance. Examples include more scholarship monies to Afghan students for study in Iran, project-specific grants such as on literacy, drug rehabilitation, conversion of opium poppy and cannabis cultivation to cotton, wheat and other crops, and linking Afghanistan to Iran's port of Chahbahar. Also, Iran may assist in training the Afghan police and army. Iran could even provide arms to the Afghan military.

Iran's aid may be provided directly or through regional organizations such as the ECO and Shanghai Cooperation Organization (SCO).

GPB: In is realistic to expect that Iran and NATO might cooperate in the future?

Afrasiabi: Possibly, though it does not seem likely at the moment, due in part to Iran's suspicion of NATO's eastward expansion, something that also bothers Iran's key ally, Russia. Yet, cooperation really depends on Tehran's reading of how dire security situation in Afghanistan may become and the strategies required to prevent a total collapse of Kabul's currently Tehran-friendly government.

For Iran the failure of the post-Taliban political order in Afghanistan is not an option.

Undoubtedly, much depends on the policy directions of the new US Administration. So far, Iran hasn't seen much to convince it that Obama Administration strategies will achieve more than the Bush Administration strategies. The reality of Iran-NATO cooperation hinges on NATO spelling out clearly what it needs from Iran, but mainly on the outcome of a US-Iran dialogue and, perhaps a US-Russia dialogue. Concerning the latter, if the US manages to convince Russia to allow more than the "non-lethal" supply through its sphere of influence or some other more meaningful cooperation with NATO, then this would affect Iran's calculations.

A complicating factor, as always, is the standoff over Iran's development of a nuclear fuel capacity and US pressure on Russia to escalate sanctions on Iran to give up producing nuclear fuel. Yet somehow it escapes Washington policy-makers that Iran may well be critical to the ultimate resolution of Afghanistan...and a strong rather than sanctions-weakened Iran will be a far more effective ally on Afghanistan.

GPB: Can the US and Iran achieve a breakthrough in their relations as a result of their common concerns over Afghanistan?

Afrasiabi: I believe the "smart power" approach for both sides would be to recognize that cooperation over Afghanistan and Pakistan is critical to stabilizing what is at present the most dangerous corner of the world and that cooperation on areas of common interest may facilitate progress on contentious US/Iran issues.

Kaveh L Afrasiabi, PhD. in political science, has taught political science at Tehran University, Boston University, and Bentley College. He is the author of After Khomeini: New Directions in Iran's Foreign Policy (Westview Press), Iran's Nuclear Program (BookSurge), "Nir/North," (NEPCO), and Reading in Iran's Foreign Policy After September 11 (2008)...

Mar 10 2009

Offering Iran a green solution to its nuclear ambitions

Iran's focus on nuclear power as the most secure means of ensuring its 21st century energy needs is fundamentally short sighted. Nuclear power is, quite frankly, a very expensive old technology whose significant waste management issues continue to challenge the world's technical community. Nuclear power plants costs US$ billions (US$ 2,000-7,000/kWe) to construct and US$ billions more must be spent to address the never-ending issues of managing and storing the highly toxic radioactive waste they produce.

Iran should set aside the goal of generating power through the application of a half-century old technology and take notice of the fact that modern nuclear energy states are de-emphasizing nuclear power and focusing on securing their future electrical power needs through novel, state-of-the-art technologies that can harness and manage electrical power from Renewable Energy sources and natural gas (which while not renewable, is the cleanest of all fossil fuels). Germany is in the process of shutting down all of its nuclear power plants, and the Obama administration has eliminated US$ 50 Billion in loan guarantees for new nuclear plants while spending $6 Billion to clean up nuclear waste sites.

Follow the money

The International Energy Agency (IEA) has estimated that $45 Trillion will need to be invested in clean technologies to bring carbon dioxide levels under control by 2050.(1) Leading by example, the United States, will be powering its economic recovery through significant investments in renewables and Clean Technology (CleanTech) initiatives, not nuclear power. President Obama's economic recovery plan has committed to investing $70 billion for renewable energy and energy efficiency measures which include $11 billion for Smart Grid Technology development.(2)

Furthermore, Iran is sitting on top of a sea of clean natural gas - Iran has the world's second largest reserves after Russia. According to Iran's Petroleum Ministry, the country has nearly 1,000x1012 cu ft (28,000 km3) of proven natural gas reserves, which represents the energy equivalent of about 170 billion barrels of oil. The USGS estimates that Iran probably has undiscovered resources that may yield upwards of another 800x1012 cu ft (23,000 km3) of gas.

And, the potential for renewables is significant. Wind energy potential in Iran has been estimated by the Centre of Renewable Energy Research and Application at 6500 MW. Installed power capacity (2007/2008) at the Manjil, Harzevil and Siahpoush wind farms in Gilan Province and Binaloud in Khorasa Razavi Province is about 75 MW. Iran's Solar potential has been estimated at 19.23 mega joules per square meter.

As Boone Pickens explains in the Pickens Plan, natural gas is a clean bridge fuel that, when combined with renewable sources such as wind power, can fully and elegantly address national energy needs while setting the foundation necessary for a shift to sustainable, clean technologies that generate electrical power from renewable sources.

The nexus of natural gas and renewable energy as the power inputs of an Iranian smart grid is compelling. The world community will welcome an Iran focused on discovering solutions to the multiple technological challenges faced with moving from an energy inefficient present to an energy optimized future. Moreover, Europe and the United States can provide innovative pipeline financing models to help Iran put in place the infrastructure necessary to participate in and benefit financially from the European and Asian gas markets which are desperately seeking alternatives to the Russian gas monopoly.

Creating energy independence coupled with environmental stewardship is the right path for all nations, and Iran has a unique opportunity to take a leadership role in the Middle East by embracing a green solution to its energy security needs. Such a move will set a tone that will be critical in re-establishing diplomatic relations and attracting foreign investment and technology sharing opportunities. Dare we imagine a day when Venture Capital firms in California are funding CleanTech startups in Tehran or Esfahan?

With an IEA estimated $45 trillion needed to be invested in CleanTech over the next 40 years, the wisest countries will see this as a lucrative new opportunity, and not a threat to national security. However, if Iran's ambitions toward nuclear power are not peaceful and are actually intended to introduce nuclear weapons to the Persian Gulf region, then any discussion about Iran's concerns over energy security is meaningless and Iran's leaders will have given up the single greatest opportunity to advance their national position on the world political stage.

If the goal of the Iranian nuclear program is to ensure its citizens with a safe and reliable energy future, then Iran cannot afford to ignore this green wave of opportunity. Each dollar spent by Iran toward a Green Persian Economy will help boost domestic health, safety and quality of life, while simultaneously helping the country achieve a significant technical advantage that will serve as a strong foundation for establishing a respected, sustainable economy...an economy that will continue to create opportunities for generations of future Iranians.

Iran's leaders must be encouraged to demonstrate the open minded agility necessary to discard old assumptions and develop an economy based on renewable energy and clean technologies: it could mean a new chapter for Iran, its people, its relations with the world community...and the planet we share.

1. Mark Scott. (2008, June). $45 Trillion Needed for Clean Tech Investment. Business Week.
2. Ayesha Rascoe. (2009, 12/February). U.S. economic stimulus to boost renewable energy. Reuters

Adib Nasle, born in Iran, is Co-Founder and Chief Strategy Officer at EDSA (http://www.edsa.com). He has 24 patents filed in the area of predictive real-time energy management and is responsible for the Company's technology and product strategies. Adib currently serves as co-Chair of the San Diego Clean Technology SIG, and also served as a steering committee member of San Diego's Clean Technology Venture Roundtable. He is a Fellow of the Aspen Institute and a member of the Aspen Institute Socrates Society...

Feb 28 2009

This ain't your run of the mill depression

To say this hasn't been a great week for the economy is a masterful understatement. The DOW is down to roughly 7,000. The Gross Domestic Product (GDP) fell in the 4th Quarter at an annualized rate of 6.2%, the steepest decline since 1982. US exports fell in the last Quarter at an annualized rate of 23.6%. Business investment fell at an annualized rate of 28.8%. Consumer spending and confidence plummeted. Unemployment claims jumped to a seasonally adjusted 667,000, the highest level in 26 years and both housing sales and prices plummeted (again). And, the rest of the world pretty much is in the tank also.

On the bright side, President Obama released a stimulus plan and budget last week that might help...kind of.

On March 18 of last year, US News & World Report publisher (and billionaire at least until recently) Mort Zuckerman told NBC Nightly News "I think we are about the fourth inning of a nine-inning ballgame, we're nowhere near the bottom of this [economic] problem and nobody knows exactly where the bottom is, but we're going to have a very serious recession that is going to go on for a couple of years."

We're no longer in the 4th inning but we're nowhere near the 7th inning stretch. We're forecasting a DOW bottom somewhere in the mid-5,000 range with real unemployment (including the underemployed and those who've stopped looking for work), which is already in the double digits, at around 25%.

We're in the middle of a depression that is following complex political, demographic and psychological patterns that compound tremendously weak economic fundamentals.  There are three critical weaknesses according to many analysts that foresaw the current crisis at least 2 years in advance, including the Global Power Barometer (GPB): 1) The stimulus even when combined with the budget is not nearly big enough; 2) the stimulus does not deal with all the causes of the depression; and, 3) despite the calls by President Obama to deal with the "foundations" of American institutions and the economy, the stimulus/banking plan is woefully inadequate.

For example, buried on page 16A of the New York Times Thursday, February 26, was a story about the latest Census Bureau report that found a record low in the households with a child under 18. This is one more reminder that, as the GPB has pointed out for two years, the United States is in the middle of a demographic crisis where the driving generation of consumer spending is quickly approaching retirement age with essentially no money and in many cases heavily in debt. The problem has affected not just middle class families but upper middle class and wealthy families.

This has two impacts. The first is physical. With no money, people simply can?t spend any more. The second is psychological. The depression has scared Boomers silly. It's a bit like the Aesop's fable about the cricket and the ant. The frugal ant who spent all the summer putting food away for the winter asked the cricket who came to ask in the fall to share of his grain, "And what were you doing all summer long, since you weren't gathering grain to eat?" The cricket answered "Because I was busy singing I didn't have time for the harvest."

The Boomers have finally recognized that they sang all summer. Asa result, at least for those who still have jobs, they've been scared into saving. Don't count on the Boomers to ever again drive us to economic prosperity. And, unfortunately, that leaves Generation Y and X to save the economy...which isn't going to happen because these generations are dramatically smaller than the Boomers, don't have money and their psychology is as bad as the Boomers.

So, as the GPB has warned numerous times, there's no one coming up to buy the houses or use the excess capacity that's been created to serve  free-spending Boomers. The stimulus contains absolutely no solution to this demographic crisis. Of course, there are two solutions. The first is for every Gen X/Y family to have octuplets and force them to grow up in a couple of years.

The slightly more realistic option for replacing the Boomers is to open US gates to educated immigrants as Australia did during from 1945 to 1965. While the GPB has called for a green card to be given to every foreigner who receives an advanced degree from an American university, there are only about 100,000 of them annually and the US needs perhaps 1 million educated, hard working immigrants annually to replace the Boomers.

New York Times columnist Tom Friedman in his February 10 column echoed the call for open immigration that the GPB has promoted. Tom quoted Shekhar Gupta the editor of The Indian Express newspaper as saying, "All you need to do is grant visas to two million Indians, Chinese and Koreans. We will buy up all the subprime homes. We will work 18 hours a day to pay for them. We will immediately improve your savings rate ? no Indian bank today has more than 2 percent nonperforming loans because not paying your mortgage is considered shameful here. And we will start new companies to create our own jobs and jobs for more Americans."  Mr. Gupta is squarely on target. Even the extreme wingnuts of the right at the CPAC meeting last week in Washington have begun to recognize that it?s not the smartest thing to oppose immigration. Unfortunately, the Obama team hasn?t yet understood that perhaps immigration is a cheap answer to consumer spending.

We don?t have the space in this Observation to deal with the size of the stimulus, which won?t produce anywhere close to the 3.5 million jobs as the Obama Administration hopes it will. Moreover, 3.5 million jobs won?t come close to replacing the jobs lost by the long-term downturn in consumer spending resulting from the depression and the loss of the Baby Boomers.

So, we'll skip to what President Obama calls changing the foundations of the American economy. One of the most critical changes that the Obama Administration seems afraid to deal with is once more returning banking and accounting to those most boring of professions, which it should be.

In 1932 and 1933, the Congress passed two bills, together the "Glass-Steagal Act". These reforms were in response to the unbridled speculation that at least partially caused the Great Depression. They separated the banking industry (which was supposed to safely guard bank deposits and mortgage lending) from the investment industry (which could creatively speculate and most times lose investors' money).

But three ill-advised Congressional actions in 1980 (Depository Institutions Deregulation and Monetary Control Act), 1982 (Garn-St. Germain Depository Institutions Act) and the worst in 1999 (Gramm-Leach-Bliley Act), essentially repealed the Glass-Steagal Act and allowed bank holding companies to diversify and set the stage for the Great Depression of 2008.

The problem was that with the effective repeal of Glass-Steagal, the best and brightest moved from science, mathematics and engineering to Wall Street and created the complex but dangerous mathematical models that resulted in US$ 500 trillion in derivatives and sub-prime mortgages.

While nationalizing the banks has been the hot button phrase, there's not really a need to nationalize if Glass-Steagal is resurrected and bank holding companies are dissolved and the traditional boring banking industry is revived. Unfortunately, the Obama Administration has not yet gotten that. If President Obama doesn't get the fact that "banking/accounting" and "creative" are a dangerous oxymoron, nothing will change and this depression will probably last until the next world war (more on that in another Observation). ..

Feb 17 2009

Pakistan gives up the Swat Valley...is it just the beginning?

On Monday, the Pakistani government did what was unthinkable just a year ago. It agreed with Taliban forces in the Swat Valley to establish strict Islamic law there in return for peace.

Over the past few years, the Taliban has been making significant inroads into the Swat Valley. Formerly known as the "Switzerland of Pakistan," the Swat Valley is a spectacular natural setting lush with vegetation, snowy mountaintops and a traditionally western-looking population. The Swat is only 100 miles from Islamabad, the capital. This dangerous shift is an indication of just how the power of radical Islamic fundamentalists is growing in Pakistan.

But the dnager runs deeper. Many western and Pakistani policy makers are asking: how did this happen so quickly? Conventional wisdom would look back to the 2001 US invasion of Afghanistan that aimed to crush Taliban rule in Kabul by setting up President Hamid Karzai and his NATO-supported government. The conflict in Afghanistan sent hundreds of thousands of refugees fleeing the country, many of whom settled in the border region of Pakistan in the North West Frontier Province (NWFP), Federally-Administered Tribal Areas (FATA) and other places in Pakistan proper such as the City of Quetta. In addition, the US-led war in Afghanistan resulted in an influx of jihadist fighters from places such as Yemen, Saudi Arabia and Uzbekistan. The result was a series of relatively safe havens for Islamist insurgents just inside Pakistan along the Afghan border. NATO had no legal method to fight these insurgents as they were in Pakistani territory. And Pakistan, wary of fomenting revolts or increasing instability in the government, could only use its military force with a certain degree of trepidation and discretion.

Pentagon and NATO leaders naturally chide Pakistan for not doing more to combat the insurgency growing within its own borders. In the recently published book The Inheritance, New York Times writer David Sanger has accused former Pakistani President Pervez Musharraf of, among other bad deeds, "double dealing" with NATO and the Taliban, accepting money to fight the insurgency while seeking out partnerships with insurgents in order to achieve strategic goals. Musharraf denied these allegations over the weekend.

Whether charges against Musharraf are true or not, it is clear that Pakistan was not ready to fight the insurgency in its own borders. The November Mumbai terror attacks, which are widely believed to have originated in Pakistan, are just one example. Pakistani President Asif Ali Zardari gave an interview over the weekend with CBS that would make anyone cringe. When asked how it was that the Taliban had secured control over the Swat Valley, he responded:

"It's been happening over time and it's happened out of denial. Everyone was in denial that they're weak and they won't be able to take over, they won't be able to give us a challenge. Our forces weren't increased and therefore we have weaknesses, and they are taking advantage of that weakness."

Denial? It seems that this same denial is what has led to the Taliban takeover of the Khyber Pass. The Khyber Pass has been NATO's main supply route into Afghanistan for the past 7 years. With this route under serious threat from the Taliban, NATO has had to look elsewhere, agreeing to Russian support and even seeking out Iranian help.

But is it all Pakistan's fault? Are the policies and inactions of Musharraf and Zardari or Prime Minister Yousuf Raza Gilani to blame for the increased influence of the Taliban in the Swat Valley and other areas of Pakistan? There is one facet of the conflict that Pakistan cannot take responsibility for: the controversial US-led cross-border raids performed by American drones flying from Afghanistan into Pakistani border regions. The Pentagon has argued that these raids are essential for preventing insurgents from rallying their forces to reenter Afghanistan and heighten the simmering conflict there. Presumably, by targeting Taliban and al-Qaeda leaders, insurgents' plans are destroyed and their effectiveness is diminished.

However, the Pentagon probably didn?t seriously consider one particular side effect of cross-border raids. The danger caused by cross-border raids in the FATA and NWFP is that it leads the Taliban to secure other safe havens in Pakistan. A prime example is the heavily populated southern city of Quetta. While drone attacks in remote mountainous Pakistan might prove effective in killing people and avoiding significant international criticism, they would be interpreted quite differently and have a disastrous result if missiles were fired in an urban setting. The New York Times suggests that Taliban use of Quetta as a hub is increasing; it's a clear case of the group adapting to evolving military confrontation.

Clearly, a new tactic needs to be taken if Pakistan is going to win in the "fight for survival" against the Taliban to which President Zardari has referred. Prime Minister Gilani argues that forging an accord with the Taliban, allowing them to establish peace and strict Islamic law in the Swat Valley, is part of a new approach of "dialogue, development and deterrence".

But others argue the ceasefire pact has the potential to give the Taliban a great deal more political influence, which could lead to the spread of radical fundamentalist Islam in Pakistan. Yet, still others say it could cause a split in the Taliban movement, between those who have brokered peace with the government and therefore have to govern, and those who remain as guerilla insurgents using terror as a weapon.

Either way, Pakistan and the US will have to agree on the best method for fighting the insurgency. While US Special Envoy to Afghanistan and Pakistan Richard Holbrooke made some progress last week, pressuring Islamabad to admit that the Mumbai attackers planned some of their operation on Pakistani soil, he still has a long way to go to achieve anything resembling a coherent policy. And, even if he does achieve a consensus with Prime Minister Gilani and President Zardari, the issue of cross-border raids remains. Since President Obama took power, the US military has performed 4 raids in the FATA and NWFP, killing a number of insurgents (and a number of civilians). President Obama still maintains that the US "will not allow" al-Qaeda and other militant groups to use Pakistani territory for a launching ground for incursions into Afghanistan. But as they say, the devil is in the details as to how he carries out this threat.

The coming months will be telling. If the Taliban in Pakistan uses its newfound legitimacy to establish a semblance of governance in the area, it will put the US and the weak and fragmented Pakistani leadership in a tough position. With President Obama ordering another 17,000 US troops to Afghanistan as the start of his "surge", the US is betting that the overstretched American military can somehow make order out of chaos in a part of the world that no country has ever been able to tame. And, it may well be the wrong target as nuclear Pakistan slips toward a situation tailor-made for a guy named Osama bin Laden.

Note that numerous articles on this topic can be found in today's Islamist Articles.

Chris Herbert is a DRGI analyst, specializing in political affairs in the Middle East and Asia. He directs the research and production of the Global Power Barometer.

Feb 9 2009

Meet Somalia's new President

In case you haven't been paying attention, on January 31st, Somali's parliament met in neighboring Djibouti and chose the relatively moderate former leader of the Islamic Courts Union (ICU) and current leader of the Alliance for the Re-Liberation of Somalia (ARS) Sheikh Sharif Sheikh Ahmed. The ICU held power in Somalia for several months during 2006 before being deposed by a US bombing campaign and the occupation of Ethiopian "peacekeeping" forces propping up a government supported by the West. But as was typical, the only thing the Bush Administration achieved was the rise of a far more radical form of Islamist group - al-Shabaab - which in January took control of Baidoa, the temporary capital.

Lawless and chaotic Somalia will prove to be a huge challenge for President Ahmed. Not only has al-Shabaab and a rival "coalition of insurgents" known as Hezbul Islam or the Islamic Party sworn vowed to fight him, the country has splintered into regional tribal factions. Pirates rule the coasts and refugee and hunger crises abound.

Ahmed has, however, taken some politically savvy steps by actually acting like the head of a government:

• Visiting the African Union summit in Addis Ababa, Ethiopia directly after his election. He courted his former Ethiopian enemies, and announced that he feels the US has a constructive role to play in the Horn of Africa.
• Pledging to hold talks with al-Shabaab and other opposition militias
• Promising to secure Somalia so that the African Union (AU) peacekeeping forces stationed there can leave.
• Committing to name a prime minister and form a coalition government in the next few days.

Jan 28 2009

Afrasiabi: What is your assessment of how the Obama administration has dealt with the Gaza crisis so far?

Kucinich: Well, it's too early to tell. We have to watch carefully how the Obama administration deals with the specific issues - getting direct humanitarian assistance to Gaza, the reconstruction of Gaza, the end of blockade, and making a new beginning with genuine peace talks based on respecting the rights of Palestinians. Both Israel and Hamas must be held accountable for any violation of international law including the laws of warfare.

I have sent a letter to President Obama and have asked other members of US Congress to sign it, pointing out that the unilateral cease-fire does not mean the end of the humanitarian crisis and cataloguing the nature of destructions, although the full scope of destructions there is still not fully known.(1) For those of us who have been working on this subject for sometime, we now have an opportunity to get our point of view across to the White House. President Obama is someone who is much more open to a broader discussion than his predecessor. However, we can't expect Obama to do in a few days what George Bush failed to achieve in 8 years.

Afrasiabi: You have called for a Congressional report on Israel's possibly illegal use of US weapons in Gaza. Please elaborate.

Kucinich: The United States signed an agreement in 2007 to provide $30 billion in military assistance to Israel over a period of ten years. The terms of that agreement are bound by the Arms Export Control Act of 1976, which says that any arms given to another country by the United States must only be used for defensive purposes. I think that a fair reading of Israel's attack on Gaza shows that Israel was involved in an offensive strike, actually inflamed the situation, and did massive damage and loss of life for civilians. So I think that a case exists to raise questions of law relating to Israel's use of US planes, helicopters and munitions against Gaza.

Afrasiabi: Are there any lessons from the Gaza war, particularly for the US government and US law-makers?

Kucinich: I think the main lesson from this tragic war is that there will never be peace in the Middle East unless we see the Palestinians as having equal claim to social, political, and economic justice. Another lesson is that we cannot let our arms given to other nations be used to attack a defenseless population. We must become closely involved in fashioning a durable peace in the Middle East - that can only come from recognition of the rights of Palestinians. We cannot look away and see the suffering of Palestinians that has occurred for generations without understanding that that they have a legitimate claim to land and to freedom.

Afrasiabi: Is the strongly pro-Israel US Congress willing to accommodate President Obama's seemingly more nuanced approach toward the Middle East problems?

Kucinich: Well, I certainly hope so. But I do believe that it is very important for President Obama to take the initiative and start moving US policy in a new direction, contacting the leaders in the region and bringing them together to reach a durable peace. We can't any longer allow a few ideologues to hold our international policy hostage and put America at odds with the rest of the world on matters of justice and international law. So, I believe Israel has the right to exist and to defend itself, but it does not have the right to repeatedly violate international law. They don't have the right to make up the law as they go along. There can't be one set of laws for the rest of the world and another set for Israel and the US. Unfortunately, the United States, which was engaged in broad violation of international law in Iraq, in effect forfeited the moral leadership in the Middle East. We are hardly in any position to preach other nations what they should do. Today, we have to set higher standards and ask Israel to abide by higher standards as well. That's part of having "smart power" I suppose, namely, smarter policies than in the past.

Afrasiabi: President Obama has appointed former senator George Mitchell as US special envoy on Middle East peace. Senator Mitchell in the past has called for a freeze on Jewish settlements in the West Bank. In light of the expanding settlements there, is a "viable Palestinian state" still feasible?

Kucinich: I would say that the strategy of a series of Israeli governments has been to make a viable Palestinian state impossible. One only has to look at the map to see that there is no opportunity for coherence, a cantonization has occurred and it now looks like Swiss cheese. How do you unite the Palestinians in a land that is geographically so divided that there is no possibility of coherence? On the other hand, we have to take a broad view of Israel's security. Israel will always be in danger as long as Palestinians are treated as second class citizens, deprived of property, land, and social and economic rights, locked in, blockaded, not having access to electricity, medicine, food, etc. As long as conditions like this exist and justice is lacking there will never be peace. There should be a way to create peace, without so many intractable problems. But as long as there appears to be a land grab and Israel continues to build settlements -- and George Mitchell who tried to stop that before, has indicated the tensions to anything that was suggested or agreed to. Israel's history as a nation when it comes to Palestinian question is to say anything but to continue in a path that rejects Palestinian rights or diminish them. And this will continue until we get a US administration willing to confront the issue head on, addressing the sufferings and security of both Israel and the Palestinians. But anyone who has followed this understands that Israel is going to be in jeopardy as long as it takes this punitive approach toward the Palestinian people.

I want to say this for the record. Israel has the right to exist. Hamas has no right to be firing rockets. But we know that it was not Hamas that broke the cease-fire,. We know it was Israel. While two wrongs don't make a right, the disproportionate use of by Israel is a matter of record. You don't have to be a scholar of international law to understand the nature of the destruction.

Personally, I have seen the past destructions that have followed in the name of waging peace. Israel a few years ago tried to knock out the PLO and they punished the people. In South Lebanon, they tried to knock out Hizbollah and they punished the people. In Gaza, same thing, they tried to knock out Hamas and they punished the people. It's the wrong approach and wrong strategy. As someone who strongly supports Israel's right to exist, I am convinced that Israel needs to adopt a new direction and the United States needs to help to foster that direction, but it can't do it through agreeing with actions that undermine basic human dignity, human rights, and humanitarian international laws that protect civilians. We have to take a stand for international law and that applies to violations by Hamas as well as Israel.

Kaveh L Afrasiabi, PhD. in political science, has also studied theology and is director and founder of the non-governmental organization Global Interfaith Peace, and has taught political science at Tehran University, Boston University, and Bentley College. He is the author of After Khomeini: New Directions in Iran's Foreign Policy (Westview Press), Iran's Nuclear Program (BookSurge), "Nir/North," (NEPCO), and Reading in Iran's Foreign Policy After September 11 (2008).

(1) http://kucinich.house.gov/..

Jan 20 2009

Obama's goals...can he execute?

At this time of change, we need to remind our readers that the Global Power Barometer measures "which nations, ideologies or movements are best exercising their power to achieve their desired goals." In the process of defining the "desired goals" of any player, we need to figure out what they are. Then, GPB staff and computers can measure progress. After a significant change in any nation's government, we need to adjust the goals we have for that country.

In the case of the new Obama Administration, we understand general directions, but we do not yet fully understand specific foreign policy goals. Nor do we fully understand execution strategies and whether the Obama Administration will learn from the mistaken strategies of the past years and begin to fight the next crisis rather than the last crisis.

Here are the general goals we've been able to identify so far:

• Restoration of US global influence. By this, we mean not just restoring the image of the US, but increasing its "soft power" or "smart power" as Hillary Clinton put it in her confirmation hearings. Certainly, the mere act of electing an African American by the name of Barack Hussein Obama has raised US standing throughout the world (a good friend of ours...a Republican...is traveling through Africa and has reported uncountable celebrations...formal and also spontaneous street celebrations). But we're not yet sure whether the Obama Administration fully understands the "power of smart" in controlling particularly the success of non-state actors such as al-Qaeda, or in stabilizing failing states, but they clearly have made re-establishing US influence a high priority. Connected with this, it appears the Obama Administration also has recognized the key role of diplomatic power in resolving international disputes...that's diplomatic "power" not just "diplomacy". It means creating and revitalizing alliances that can themselves put pressure on rogue nations. At least initial signs are that the new Administration gets the point that multilateralism - not unilateralism - is key to a peaceful 21st Century world.
• Phased withdrawal from Iraq. The Obama Administration is stuck with what has been negotiated between the Bush Administration and the Iraqi government...due for a vote in July. But the trick will be how they deal with the inevitable increases in conflict among religious groups and tribal factions as Iraqis have to govern themselves (see today's US Articles).
• Reintroduction of the US to the Mideast peace process. We've not yet identified a goal because many analysts believe the 2-state option is dead, having its coffin sealed by rocket attacks and the Israeli tactic of punishing civilian populations for transgressions of its elected leaders. Without a clear view of a solution, the present Obama goal is only to get itself back into the game. Of course, connected closely to this is the US relationship to Israel. Obviously, Mr. Obama will keep the relationship strong. But in the incremental world of diplomacy, many analysts expect an Obama Administration to begin in subtle ways to pressure Israel and take an ever so slightly more balanced role in the Mideast. One key indicator the GPB is watching is whether President Obama will appoint former Sen. George Mitchell to the post of Middle East envoy. Senator Mitchell is considered to be one who, while maintaining the US relationship with Israel, would also pressure Israel incrementally for new solutions. That said, the GPB will be looking very very hard toward the form of a new solution from the Obama Administration.
• Calming Afghanistan. During the campaign, candidate Obama stated he wanted to effect an "Afghanistan surge"...more troops to calm the nation and more money to reconstruct Afghanistan. Yet, most analysts question whether more US troops are the answer. A number of NATO members believe Afghanistan was handled so badly that it is essentially lost.  They are trying to reduce their troop levels. While there are differences between the Soviet experience and strategy and the current US strategy, many point to the fact that the USSR couldn't subdue Afghanistan with a considerably larger force. The measure of whether the Obama Administration will make progress in Afghanistan will be viewed by the type of strategy they develop (e.g., one that involves political integration, assistance from Iran and other new tactics) and the progress that strategy creates.
• Defeating al-Qaeda.  The lack of any attempt to disrupt the Obama Inaugural despite its attractiveness and relative ease as a target has suggested that President Bush is correct that constant US military pressure has weakened and isolated al-Qaeda. Yet, the Bush strategy is unsustainable in terms of cost.  While denying al-Qaeda safe haven in the border areas of Pakistan (without destabilizing Pakistan) is an important goal, the ultimate success of the Obama fight against terrorism will depend on whether the new national security team can find new approaches sustainable over the long term that don't destabilize countries or regions..
• Independence from oil. Obama has set as a high priority weaning the US from oil...not just foreign oil, but oil in general. This goal has the potential for the greatest foreign policy benefit of anything since the US entered WWII. But it won't be easy...though given that energy independence is as much a question of infrastructure development (e.g, natural gas, electric distribution) as technology, it may be more possible at this time of economic stimulus than at any time in history. We'll be watching closely.
• A new approach to Cuba. This is actually part of an apparent goal to change how we deal with "enemies" such as Venezuela and Iran. However, Cuba, 90 miles off the Florida shore, is perhaps most important. While candidate Obama proposed only incremental steps, the opening of Cuba could be the most important symbolic move of the past two decades and could create opportunities with developing nations across the globe. This in turn would lead to a significant strengthening of the US against its rivals, Russia and China, for the (in many cases natural resource-rich) non-alligned nations.
• Russia and China? We lump these together though the strategies for dealing with either would be very different. We have not yet seen much evidence of a new strategy for dealing with these countries. We're anxiously awaiting clues.
• Nuclear non-proliferation. This is a key challenge but it can only be achieved by the "smart power." It appears the Obama Administration as a top priority will restate US adherence to critical treaties that the Bush Administration decided to ignore. Yet, much more needs to be known about new initiatives to convince rogue nations such as North Korea to abandon hopes of becoming nuclear powers.

Jan 9 2009

The dispute between Russia, the Ukraine and Europe is different this time.

Disputes among Russia, the Ukraine and Europe are not news...they've happened for years. But this time it's different.

In the past, disputes were controlled by a strong Russia, flush with the power of high oil and gas prices, who was able to impose its will on its neighbors as a feudal lord would to his tributary vassals. By using its political power and energy transportation monopoly on its former Soviet states, Moscow raised prices unconscionably. For example, during a 2007 dispute between Russia and Belarus in which Russia threatened to cut gas deliveries if Minsk did not agree to Russian terms, Moscow was able to drive up prices from $47 to $100 per 1,000 cubic meters. Although Russia had originally demanded $200 per 1,000 cubic meters, the increase of over 100% was nonetheless revolutionary - a gigantic victory for Gazprom.

But Belarus' history with Gazprom is simple in comparison to the Ukraine's. Kiev has been a formidable thorn in the side of Russia for the past decade, especially following its famous pro-western "Orange revolution" and its recent (though unsuccessful) bid to join NATO. Russia has waged technological warfare on this closest of former Soviet republics by hacking into Ukrainian websites, and has even issued Russian passports to Ukrainians in the Crimean Peninsula. Relative to gas shipments, Kiev and Moscow have sparred over gas pricing, tariffs for gas transport, and debts of millions of dollars that that Russia says it is owed. Each time, disputes were resolved at Kiev's expense with Kiev agreeing to pay more at increased rates.

But now, Russia is greatly weakened. Oil prices have fallen dramatically, greatly impacting a Russian economy nearly completely dependent on its energy industry. The state-held oil and gas conglomerate Gazprom is the world's third largest corporation and has a virtual monopoly over gas shipments to most eastern European countries. While gas prices have not fallen as drastically, the price of oil has affected almost every corner of the Russian economy and pushed more of a premium on extracting profit from gas sales.

Meanwhile, other sectors of Russia's economy, such as the already weak manufacturing sector, have faltered even further. In November and December, Russia devalued its currency, the ruble, 12 times. The only thing that seems to be booming for Moscow is its military-industrial complex. Following their successful invasion of Georgia in August, President Medvedev and Prime Minister Putin have announced new efforts aimed at building new inter-continental ballistic missiles, selling defense shields to Iran, and giving fighter jets to Lebanon. Many global analysts agree that all these programs are part of Medvedev's and Putin's efforts to increase domestic support for the government amid bleak economic conditions.

According to Gazprom executives, Kiev owes Russian conglomerate a $1.67 billion debt for gas supplies and $450 million in fines. Gazprom has also differed, as usual, with Ukraine's Naftogaz over pricing. The difference this time: Ukraine has played much harder to get. Perhaps this is because of Kiev's closer ties to the West. Or perhaps it feels it has a solid case against Russia, which it knows has weakened. Or perhaps it really is "stealing" gas supplies as Russia has accused it of doing. And, Ukraine has said it has enough gas in reserve for this entire winter.

Either way, the dispute has caused Russia to shut down all delivery via Ukraine to Europe. 4/5 of all gas from Russia to Europe goes through pipelines in Ukraine.

But Russia's bullying may not be in its best interests this time. As the Global Power Barometer has mentioned in the past, Russia's response to its domestic weakness has not been to be more conciliatory but to be more aggressive. Russia has decided to put Ukraine in a very difficult position.

The people who are really suffering in the short term are the European customers, especially in the Balkans, who have seen most or all of gas shipments halt. But in the long term, the real loser is Gazprom and the Russian economy.

Europe is weary of Russia's frequent "boy who cried wolf" tactics. What's more, Kiev has shown that it will not give in to Moscow's bullying. Though Russia has suggested it will eventually be able to supply gas to Europe via its planned South Stream Pipeline underneath the Black Sea, such a project is far off. In the near term, it will be much more likely that the European Union will redouble its efforts to find alternative sources of gas perhaps even proposing a deal with the US, Canada or Mexico to build LNG facilities to transport gas from the cheaper North American market to Europe (there's about a US$3 difference in the cost of natural gas between North America and Europe).

As Tanya Costello, a director of the Eurasia Group in London says (reported by Reuters today...see today's Russia articles), "The EU will now be thinking more than ever that, whoever is to blame, the relationship between Russia and Ukraine over gas is very problematic and puts gas supply to the EU at risk. That will strengthen the political will to further projects that would allow the EU to diversify away from Russian gas."

Be watchful at the Inauguration

Let us be clear. The Global Power Barometer staff has no direct knowledge of any direct terror threats to the Obama inauguration. Nor to our knowledge has the US government announced direct threats. However, the index the GPB uses to gauge whether terror is in the interests of groups like al Qaeda is at one of its highest point in 7 years. The primary reasons are the following. First, al Qaeda in particular needs to reassert its global reach in order to restore its power and credibility. Second, while George W. Bush was a terrorist's best friend and greatest recruiter, Obama with his appeal particularly to the Muslim world is a terrorist's worst enemy. If he changes policies dramatically from the Bush Administration and can avoid the traps of responding, as Bush has, in the way terrorists want, he can significantly weaken terror organizations all over the world. That said, any good strategist on the terror side will know that they have to strike in the US to attempt to push Obama in the direction of Bush reactions. There's no better target to accomplish that than at the inauguration. They likely won't bother with closed parties with tight security. But the sheer number of people attending and the softness of public targets may be irresistible. Be careful if you're going to attend public inauguration events. ..

Dec 21 2008

The real challenge for Obama and his team: Prevent global chaos.

Forget Mr. Bush's legacy as the guy who drew the US into a disastrous war in Iraq. Rather, Mr. Bush may be most remembered for plunging the world into a pervasive instability, caused by the global economic crisis, that brings the world to the brink of outright chaos. And, while Mr. Bush's policies compounded the problem and drove its severity to heights never dreamed of, the philosophy of Ronald Reagan spawned it. Bush 41 and Bill Clinton exacerbated it...and factors completely outside Mr. Bush's control, like demographics and the bad habits of Baby Boomers drove its speed and depth.

But placing the blame won't help Mr. Obama and his team avoid a cycle of disastrous global instability (that, by the way, will further fuel the economic crisis). But understanding that it's coming and what it means is a first step.

First, understand that the economic crisis may last a decade or more, and, it most likely will get much worse before it gets better. It's caused by a combination of demographics, deregulation, depression (fear and the decline of consumer confidence) and disappearance (of US consumer spending). Out of these four causes only deregulation can be fixed quickly...and that horse unfortunately is already out of the barn.

The US Federal Reserve Bank ("Fed") has recognized the severity of this decline as have many governments around the world and all are lowering interest rates and printing money like mad to goose their respective economies back into a semblance of health. They may be successful but that's by no means certain particularly over the short term. And, that's the scary part.

As many of our readers know, the GPB tracks the emergence and consensus of cutting edge analysts the world over. And, they've passed the first significance threshold in the GPB systems for a warning on coming global instability in critical countries like China, Russia and even the United States. The instability is not just internal. It affects how these countries interact in the world and the aggression they show to their neighbors and rivals.

Let's look at just some of the hot spots.

The two most dangerous are clearly China and Russia. Both countries have had significant growth rates over the past decade that have raised expectations in each nation and changed the internal dynamics of the countries. In China, the rural poor have moved to the cities to work in export-based factories. Russia has had its first baby boomlet as its recent fast growth actually did trickle down. Both have enjoyed the stability that comes with economic optimism.

But the global uber recession (a nice word for a depression) has changed all that. We'll cover Russia in the next Observation. Here we'll look at China.

In China's Guangdong Province, ground zero in the Country's export business, the New York Times reports that more than 7,000 small and medium sized factories have closed. Last Saturday, China's official news agency, Xinhua, reported in China View that "According to the latest survey from the Ministry of Human Resources and Social Security this week, 4.85 million jobless migrant workers had returned to their hometowns by the end of November, and nationwide, more than 10 million of migrants are currently out of work."

State Council advisor Chen Quansheng told a forum in Beijing on Friday that some 670,000 small firms had closed their doors. Xinhua says that about 6.7 million jobs have vanished in recent months pushing the unemployment numbers far beyond the official of 8.3 million.

And it's not only migrant jobs that are vanishing. At the end of 2008, 1.5 million university graduates have failed to find jobs (a 12% unemployment figure among new graduates), prompting Chinese Premier Wen Jiabao to make a special visit to students at the Beijing University of Aeronautics and Astronautics on Dec. 20 to reassure them that the government views jobs for grads as a top priority. "Your difficulties are my difficulties, and if you are worried, I am more worried than you," Wen told students.

In a country many analysts believe must grow its GPB at least 8%/year to generate the 20 million jobs required to maintain confidence in its government, these are not good signs. Some believe China's 2009 growth could come in below 4% as industrial production plummets.

Perhaps as serious as the real numbers is the rapid decline in worker confidence. "There is a strong sense of insecurity among migrant workers, college graduates and even white-collar workers amid the global financial crisis," Guo Weiqing, a professor of public administration at Guangzhou's Sun Yat-sen University, told China Daily (reported in China View).

Most analysts believe the biggest risk with China's economic problems is internal. In a nation where "mass incidents" as demonstrations are called can sometimes number nearly 300/day, social instability is a constant worry. Reuters has reported, "Labour strikes, small scale protests and land disputes are already cropping up across the country. Disappointed students who will soon graduate add to the problem." Chinese newspapers have begun opinion pieces on the importance of social stability, a bad sign. Few believe the current economic problems will seriously threaten the Chinese government, particularly given that it weathered the Asian financial crisis of the 90's where China's growth sputtered to a crawl. But others warn that the difference then was that the American consumer was strong and growing stronger. The American consumer will not be there this time to fuel exports and according to various Chinese economists, not enough of China's recent growth trickled down to allow internal consumption to revive the economy by itself.

The Chinese government has announced numerous stimulus packages and local governments are providing subsidies for migrant works and small loans for new citizen businesses, but few believe it will be enough to rescue the economy without revived exports, which few believe will occur in 2009 or even 2010.

There's another effect of the Chinese slowdown. As jobs dry up in China, foreign workers are returning home to countries around southeast Asia. Some 250,000 workers, for example, have returned over the past few months to Indonesia. With an unemployment rate over 9.5% and nearly 2 million jobs at risk form the current global crisis, this is not something that will contribute to Indonesia's stability.

If the global slowdown is not reversed next year, the leaderships of multiple Asian nations, including China, could be threatened. And anything that threatens the stability of some of the world's most populous countries is an unnerving thought.

Yet, while many Asian countries are most likely to focus internally to resolve their instability, many analysts are concerned that Russia could focus externally. The GPB will consider the global effects of Russia's economic turmoil in the next Observation.

..

Dec 10 2008

Everybody is ready challenge the new American President. Can he handle it?

The world is going to change January 20 when Barack Obama takes office - both domestically and probably most dramatically in the US approach to foreign relations. As the world says good riddance to the Bush Administration's bumbling and tragic foreign policy, friends and foes alike are either trying to make nice to Obama or box him in even before he assumes office.

Here are a few examples:

Russia is playing nice (kind of). Russian President Dmitry Medvedev, who was expected to be hawkish when visiting Venezuela and Cuba this past week to sign a host of bilateral military and economic deals, was strangely low-key, seeming to make concerted efforts to let Washington know it doesn't want to challenge its traditional hegemony in the Western Hemisphere. At the same time, Russia has "encouraged" the new President not to continue with a missile shield in eastern Europe by threatening not just a new generation of missiles but placing those missiles on its eastern border.

Iran is ignoring the US and acting to increase the influence it has gained as a result of the Iraq war. Current estimates are that Iran now has 5,000 operating centrifuges as it continues to build its nuclear enrichment capability. But Iran is also a major reason things have quieted in Iraq as it extends its influence to the Iraqi Shia population. Many analysts believe Iran now effectively controls southern Iraq, much of Baghdad and the border area of the Kurdish region. And, of course, the predominantly Shiite Iraqi government has formed a close relationship with Iran.

The Latin American Left is making nice to US enemies but has its own economic worries. Governments in Venezuela, Bolivia, Nicaragua, Ecuador, Brazil and Cuba have gained new support from both China and Russia as they ignore the traditional Western Hemisphere hegemony of the United States. Panama, a US ally, recently allowed the first Russian naval vessel since World War II to pass through the Panama Canal. But some Latin American governments, particularly Hugo Chavez's Venezuela, are threatened by plummeting oil prices.

Israel's right wing will try to box Obama in, particularly regarding Iran. Recently, a report surfaced that the Israeli Defense Forces (IDF) have made specific plans for bombing Iran. These plans are in clear opposition to the Bush position and will present President-elect Obama with a monumental challenge. Moreover, Israel is carefully watching the Obama team as they craft a new peace strategy after 8 directionless years of US policy toward the Israeli/Palestinian problem. Israel is pushing for the status quo but representatives of Israel's peace movement are showing up in Chicago and getting an audience.

In Afghanistan, President Karzai is distancing himself from the US. Despite desperately needing US assistance, NATO's attacks in both Afghanistan and across the Pakistani border are both embarrassing Karzai and radicalizing the populations of various parts of Afghanistan and Pakistan. The lack of a coherent reconstruction strategy and few funds to accomplish even a modest set of programs is also contributing to acts by Karzai such as seeking negotiations with the Taliban and signing an anti-cluster bomb pact at the UN in direct defiance of Washington.

Radical Islamist Groups are also trying to box in Obama. Extremists such as al-Qaeda and the Taliban have been the most obvious beneficiaries of the Bush agenda. In Somalia, where a 2006 US bombing campaign essentially marginalized relatively moderate Islamist leaders, a much more radical Islamist element will likely take over the country in late January when Ethiopian troops pull out (this radical Islamist power already controls most of key southern Somalia). In Afghanistan, Taliban leaders have refused to negotiate and will likely step up attacks in the spring before more US troops can be inserted. Radical Sunni Islamists will likely launch new attacks in Europe and possibly even on US soil to box Obama into continuing the Bush approach to the War on Terror. And, as the Mumbai attacks demonstrated, radical Islamists will push hard to destabilize both Pakistan and India.

Even NATO is defying the US by its recent diplomatic re-engagement with Russia while talking with President-elect Obama's team about new strategies for dealing with Russia.

Many analysts believe President-elect Obama will have a reasonably long honeymoon, which may be true on the domestic front, but it will not be true internationally. US rivals from Russia to radical Sunni Islamists will challenge a President whom they fear could ruin their recruiting, undercut them with their own audiences, and restore lost US influence.

Current political patterns suggest that challenge is likely to come in one of many ways including:

• An attack on US soil. Al-Qaeda has lost global credibility in recent months, not because it's a spent force but because it's been focusing in its backyard. To regain its influence as a global force, al-Qaeda needs to hit Western interests. Many analysts point to recruitment efforts for European foot soldiers who could pass through US customs without suspicion. The underlying GPB systems are at their highest levels in several years for at least an attempt at a US attack in the first 6 months of 2009.
• The Eastern Europe missile defense system. Russian President Medvedev has already fired shots across Mr. Obama's bow by threatening a new generation of missiles placed on Russia's western border if the US continues with plans to place missile defense systems in Poland and other former Soviet satellites.
• NATO expansion. The GPB has written several times on the problems associated with NATO expansion to former Soviet states. Both Georgia and the Ukraine would elicit strong reactions from Russia and likely weaken NATO.
• Iran. Iran presents a challenge to Obama not because of its nuclear enrichment, but because of the opportunity it presents. As Robert Baer said in his recent book "The Devil We Know", Iran is perhaps the only country in the Middle East that can negotiate and keep comprehensive international agreements. And, as has been both intimated through back channels and said directly by President Ahmadinejad, Iran is ready and willing to talk with the US about many issues.
• Somalia. Ethiopian troops are presently pouring into Somalia to fight radical Sunni Islamists who have taken over much of the country. This is just weeks in advance of Ethiopia's avowed date for withdrawing after an unpopular two-year stint attempting to keep the peace. But it's unlikely that Ethiopia's "surge" will actually do much more than postpone the takeover by Islamists. Indeed, as part of a deal to try and boost more moderate Islamists, Sheikh Sharif Sheikh Ahmed, the leader of the deposed Union of Islamic Courts was just this week brought back to Somalia. The United States will be faced in the New Year with the choice of again bombing Somalia to prevent an Islamist takeover or dealing with a country run by Islamists. It will be perhaps a first test of whether there is innovation and an understanding of the new world within the Obama team.

Nov 25 2008

Islam for piracy...could that be the deal that quiets Somalia?

How things change. Recently, governments and analysts seem to have undergone a paradigm shift, suggesting that negotiating with radical Islamists could be an interim solution for bringing stability to some of the world's most volatile areas. Some US and Iraqi politicians have suggested talks between Sadrists, Anbar Awakening Councils and moderates in Iraq (with US military supervision).

Governments already are engaging with Hezbollah in Lebanon. Still others are advocating stability pacts with Islamist tribal leaders in the tribal areas of Pakistan. And, Saudi Arabia has initiated a process for peace talks with the Taliban in Afghanistan (supported by President Karzai).

Granted, global thought leaders are divided about whether this will be an effective strategy. But if we've learned anything from the "War on Terror" it's that Islamic militants are very good at using US military forces to inflict collateral damage, enraging local populations and creating not just recruitment bonanzas but routes to power. So it is understandable that many governments are endorsing approaches other than traditional warfare.

Could Somalia, a chaotic mess that can scarcely be called a country, be the first opening for these new tactics?

For the past 20 years, Somalia has been without effective government, has endured famine and drought, has been ravaged by war, and has failed to rebuild the necessary institutions of a civil society. The closest Somalia came to order was in 2006 when the Islamic Courts Union (ICU) established effective rule over much of the southern part of the country, centralized in Mogadishu. ICU rule was actually endorsed by Somali businessmen. Security, civil services, police forces, banking and forms of insurance were assured for all who swore allegiance to their restrictive form of Sharia law-based government. While human rights organizations took great issue with iCU rule and western governments cringed at their anti-Western propaganda, few experts dispute that the ICU in a short period made more progress at settling Somalia than the West did in a decade.

But stability if created by Islamists was a no-no in the Bush War on Terror. So, in January 2007, the US launched a bombing campaign targeting ICU leadership and engaged in a complicated alliance with locally reviled Ethiopia. Ethiopia ultimately sent "peace keepers" into Somalia and wrested control for a US-approved transitional government based in Baidoa (in the south, halfway between Mogadishu and the Ethiopian border). The reasoning behind the American bombing campaign was the supposed lesson in Afghanistan.

Prior to 2001 Afghanistan was the only nation in the world led by a fundamentalist Islamic government. While some analysts say the Taliban didn't understand what they were getting into, they nonetheless gave sanctuary to al-Qaeda and Osama bin Laden who shared they fundamentalist philosophies. The last thing Washington wanted was another country controlled by those who might again give refuge to al-Qaeda.

But typical of the War on Terror, what has transpired since in Somalia has not been peace or order but violence, famine, a rise in piracy in the Gulf of Aden, and a Horn of Africa on the brink of chaos. And, an even more radical group of Islamists, the Huzbul-Shabaab, meaning "Party of the Youth") is on the brink of controlling the country.

Somalia's western-recognized transitional federal government has become more and more irrelevant. Over the last two years of chaos, Somali society has polarized among pious Islamists reclaiming southern cities without a fight, opportunistic pirates based out of the north holding the global shipping industry captive, and the majority of the population on the brink of another famine.

As for the pirates, their headquarters are in Eyl, a northern coastal city flush with cash. Capturing ships and holding them for ransom is quite profitable, with some estimates suggesting pirates have earned $150 million in ransoms this year alone. The pirates have asked US$15 million for their most recent capture of the Saudi mega-tanker Sirius Star holding US$100 million worth of oil.

The West and Asia will ultimately intervene...some have recommended a blockade of the entire Somali coast. Already, ships are diverting around Africa and traffic through the Suez Canal has fallen. Various navies have battled pirates with India destroying one pirate attack boat. The US and Europe have warned shippers to hire mercenaries.

But how do you fight a dispersed non-state actor using naval guerrilla tactics in a maritime area larger than 2.5 million square nautical miles (16,000 ships have plied these waters so far this year)? Many military strategists have remarked on the impossibility of eradicating piracy along the Somali coast. Perhaps British Royal Navy Commodore Keith Winstanley said it most clearly this past week: "The pirates will go somewhere we are not. If we patrol the Gulf of Aden then they will go to Mogadishu. If we go to Mogadishu, they will go to the Gulf of Aden."

Another option is to try a new tact.

The most traditional and pure Islamists, among them Hizbul-Shabaab, do not approve of piracy and there has been talk among them of shutting down the piracy, which could be accomplished by a force actually governing Somalia.

The ICU took over southern Somalia in 2006 by imposing order and establishing governance rather than by conquering. They've done again this year.

But despite their ability to calm Somalia, these Islamists have to be worried about the US, who at least over the last 8 years has proven it would rather have famine, violence and chaos than a fundamentalist theocracy. Yet, this time Islamists may have a chit...the ability to cut off piracy and restore unfettered shipping.

Would Somali Islamists trade an end to the pirates for Western acquiescence to their rule over Somalia? Certainly, stranger things have happened. And, Somali Islamists have the political smarts to understand and negotiate the trade. The West has great incentive for striking a deal and in the US an Administration takes over in January that actually may understand how the world works.

But that won't mean it will happen. While the most conservative of Somali Islamists have philosophical problems with piracy and understand the chit they hold, there are many within the movement that would rather profit from it...some analysts familiar with the region say the split is about 50-50.

How will the West react? If Hizbul-Shabaab were to take real steps to end the piracy and actually free one or more ships, it would put the West in a tremendously difficult position with possible pressure coming from India, China and other Asian nations to recognize or at least acquiesce to Islamist rule.

As of the publication of this Observation, Reuters has reported that Islamist militias have stormed at least one pirate village in the Haradheere area looking for the pirates holding the Saudi Sirius Star. Islamist spokesman Abdirahim Isse Adow, who represents the Islamic Courts Union has said they want to free the Star because it is a "Muslim" ship.

Whether Somalia's Islamist factions would strike a bargain to end piracy in exchange for non-interference with their rule is certainly a long shot. Western agreement to such a deal is also a long shot. Yet, both sides have something to gain from a deal and the old tactic of bombing the one group that managed to bring some stability to Somalia achieved nothing more than continued violence and an interruption of international shipping that hasn't been seen in years.

So, there could be a quiet win-win here. Stay tuned...

Nov 15 2008

Those wishing to continue the Syria discussion can click here.

Can Obama impact the Congo crisis now?

With the election of its first African American President, Barak Obama, the United States stands to reassert its historical influence in the world. But this will not be through use of the hegemonic hard power that has fed terrorist recruitment and alienated the people the world over but rather with a potent new soft power personified by Obama and the values of diversity and democracy.

That is, assuming President-elect Obama knows how to wield this new power.

An early test for Mr. Obama is found in the Democratic Republic of Congo, a crisis that threatens not only the Congo but also its 9 neighboring countries including the always-fragile Rwanda.

In his first post-election news conference Obama emphasized that the US has "one president at a time" and that president Bush was leading the nation until January 20th. However, given his substantial political capital on the African continent, he should nonetheless consider addressing the Congolese situation before another five million lives are lost, as occurred in the 1998-2003 period of Congolese violence.

Last week, an emergency summit in Nairobi, Kenya, brought together regional leaders as well as the UN Secretary General, Ban Ki-Moon, resulting in a communique calling for an immediate cease-fire and the creation of a "humanitarian corridor" to allow aid agencies to reach now starving refugees. But since the key rebel leader, former general Laurent Nkunda, wasn't invited, the summit fell short of a solution. Nkunda has since warned other African governments not to send peacekeepers to aid the current Congolese president, Joseph Kabila.

Caught in the crossfire are 17,000 UN peacekeepers, some 6000 of them directly lined up against Nkunda's Tutsi rebel forces of the National Congress in Defense of the People, known as CNDC. The UN peacekeepers are largely unable to protect the Congolese civilians from warring militias. In his recent report to the UN Security Council, Alan Doss, the head of UN's mission to Congo, conceded that the conflict's progression to other provinces represents a "very dangerous situation." Yet, the European Union has already declined to send more peacekeepers and the African Union has its hands full in Darfur and elsewhere in Africa.

The United States has traditionally stayed away from peacekeeping roles in favor of financial and other support. The current US representative to the Congo, Jendayi Frazer, has adamantly refused to engage in a dialogue with rebel leaders.

What analysts believe the Congo needs more than anything else right now is political reconciliation. One solution put forth is to set a new timetable for national elections presently scheduled for 2011. Without reconciliation most feel the civil war will make these elections impossible and according to Jean Marie Guehenno, UN Undersecretary General for Peacekeeping Operations, that would be a huge setback for the Congo, Africa and the UN which has invested so much in the Congo as a litmus test for its peacekeeping activities. (1)

According to a high level UN official who spoke with the author on the condition of anonymity, there is still room for negotiation with Nkunda, whose demands are listed as "dialogue with Kinshasa on army integration within the framework of AMANI agreement, the return of Rwandan Tutsi refugees back to Congo, disarming and removal of the predatory FDLR (Democratic Forces for the Liberation of Rwanda) from Eastern Congo, and power-sharing." When asked if he thought Obama could make any difference, the UN diplomat instantly responded that Obama "can make a lot of difference, without a doubt."

The same UN official suggested Obama could send a few hundred or so US soldiers to join the blue helmets in Congo. Even a mostly symbolic initiative would be warmly welcomed as "a sign of US foreign policy changing for the better," he continued.

A Congo initiative by Obama is risky and has the potential to backfire if he is rebuffed by the government or the rebels. Appeals by the Pope and UN Chief Ban have fallen on deaf ears. But, the inherent credibility of Obama in Africa, a continent that universally reveres him as a native son, suggests an attempt is warranted. And after all, Obama has praised UN peacekeeping as "perhaps the world's best example of the value of international cooperation - demonstrating the wisdom of burden sharing so that no nation has to pay all the bills or take all the risks associated with international peace and security."

Time is of essence however. Waiting till January 20th may be too late. Nkunda would be hard pressed to ignore a direct appeal by Obama now, particularly if the request is correctly nuanced to appeal to both the government and rebels. That "nuance" includes: A) Recognizing that Nkunda has "political aspirations" that cannot be wished away as some UN officials have done; and B) creating pressure on President Kabila to make the political concessions necessary to bring the Congo back from the brink of a full-fledged civil war.

Presently, the right words from Obama could have an impact and test the waters without risking a backlash that could affect his Presidency. What's more, Obama exploit a turnaround in the Congo crisis to revamp US foreign policy. He could use the crisis, for example, to support the establishment of a new State Department capacity focused on conflict resolution.

Clearly, an Obama-led foreign policy reform must lead to bureaucratic change, but he must go beyond this management tact. Addressing the violent and destructive conflicts on the African Continent and restoring US influence around the world will require above all a diplomatic style that uses his greatest weapon -- his personality and understanding of diversity. It may even require bold travel to the troubled regions of the Congo, Africa and the world. It will mean direct mediation of conflict instead of "diplomacy by remote control."

Obama will also need to seek innovative advisors that understand the 21st Century world. Unfortunately, the talk so far suggests Obama is seeking mainstream, old-line "Clintonite" advisors. Taking this course would be a tremendous mistake and say to the world, the US is going backward, not forward.

Indeed, the US can once again become the world leader after so many years of tragic missteps by George W. Bush. But whether a President Obama succeeds will be seen in the next few months by his choices of people, his style of engagement and his innovation in overall foreign policy strategy.

Kaveh Afrasiabi, a frequent GPB contributor, is a prolific writer and political scientist who has taught at Tehran University and Boston University, has done research at Harvard, UC Berkeley, and the Institute For Strategic Studies (Paris), and has worked with UN. He is the author of numerous books and is a columnist whose writings appear regularly in publications as diverse as the Asia Times, the New York Times, the International Herald Tribune, Middle East Journal, and others. His upcoming books, to be published this Fall, include "Reading in Iran Foreign Policy" (co-authored with Abbas Maleki) and "Looking For Rights at Harvard." (1) UN Chronicle , "Conversation of Kaveh Afrasiabi With the Under Secretary General For Peacekeeping Operations," UN Chronicle (No. 2, 2007) http://www.un.org/Pubs/chronicle/2007/issue1/0107p16.htm ..

Nov 7 2008

Syria: A Tenable Peace with Israel next year?

One could argue that the opening of a Syrian Embassy in Beirut last month signaled a radical shift in the politics of the Middle East. Damascus, which has long considered its neighbor more a rebellious province rather than an independent nation, has now officially recognized Lebanon. What's more, with the opening of Beirut embassy, Syrian President Bashir Assad has made good a promise to French President Nicolas Sarkozy with the intent of showing that Syria wants to be considered a reliable negotiating partner as it moves to reengage with the West and its Arab neighbors. The recent indirect peace talks with Israel via Turkey have further laid the foundation for constructive peace negotiations. Perhaps most importantly, with the election of Barack Obama as US President, many analysts believe Syria will further engage in negotiations to leverage the coming change in US foreign policy.

But creating a constructive relationship with Syria won't be easy. On October 26, the US military made an incursion into Syrian territory to pursue what it called Al Qaeda operatives. This was the result of continuing US frustration with Syria's inability to curb insurgent movement into Iraq. What has ensued since includes a flurry of diplomatic posturing with the opening and closing of embassies, a visit to Damascus by Iranian Foreign Minister Manoucher Mottaki to Damascus to underscore Tehran's support for Syrian territorial sovereignty and a build-up of Syrian troops along the Lebanese border.

As analysts speculate on the whether Damascus truly wants peace with Israel, most believe it is in Syria's best interests to reach a negotiated settlement. It is clear that Syrian President Assad wants to end the long-term isolation where Syria's closest allies are Iran, North Korea and violent non-state actors like Hezbollah and Hamas. Making peace with Tel Aviv is a clear path to reengagement with the West and the economic benefits it can bring.

But can Syria afford the internal and regional cost of peace with Israel? Are the benefits worth it? Let's look at the key issues:

• Golan Heights: The most significant stumbling block to any Israel-Syria agreement is the territory held by Israel since 1967 called the Golan Heights. Populated by Arabs, it historically was affiliated with Damascus. Recent diplomatic chatter has suggested that Israel might be prepared to relinquish the Golan Heights to Syria in return for a lasting peace agreement. Perched high above the surrounding region, the Golan Heights is more than a strategic territory. It supplies Israel with half of its drinking water. In an ever-drying Middle East, the last thing that Israel would do would be to strip itself of its own water resources. However, Turkey and even Syria have suggested answers to the water supply issue: Turkey has offered to divert streams from the headwaters of the Tigris and Euphrates into Syria, and Syria has offered to build desalinization plants so that Israel could continue to use water from the Golan Heights.
  
  
• The alliance with Tehran: Shia Iran and Sunni/Alawite Syria have an uncomfortable alliance due mainly to their analogous pariah status in the Middle East. They have neither common strategic goals nor common ruling ideologies, but they have adopted an awkward friendship that boosts their mutual security and bolsters their asymmetrical military deterrent (e.g. Hamas and Hezbollah). Turning from Tehran, a condition the West and Syria's Arab neighbors insist upon, would be a major shift and it would have unknowable and potentially violent political implications within Syria and across the region.
  
  
• The complications of being friends with Hezbollah and Hamas: Syria's relationship with both Hezbollah and Hamas is a complicated and contradictory labyrinth. Syria has supported Hezbollah in the past as a tool to counter and control the Beirut government. Now that Hezbollah is entering the fold of the Lebanese government and Syria has established a permanent embassy, Syria may be able to withdraw support from Hezbollah without drawing too violent a backlash. In absolute terms, it is not in Damascus' interest to support a powerful Hezbollah...Hezbollah is a Shi'ite group and Syria is a Sunni country run by an Alawite minority. Therefore, Hezbollah is in no way an organically compatible entity for the Syrian government. Though Syrian intervention in Lebanon would likely continue, most likely via Hezbollah, it would proceed more covertly and have less direct impact. As for Hamas, Syria uses the organization as leverage over Israel and over the Israeli-Palestinian peace process. It is likely that Syria would be asked to curb its support of the militias operating mainly within the Gaza Strip. Syria could very well change sides to support Fatah whose beliefs are more compatible with Syria's Ba'athist ideology. It must be noted that the impact of reduced Syrian support for these groups is unknown since it is unclear how much Iran has a stake in Hamas and Hezbollah.
  
  
• The internal political risks of an Israel peace settlement for Assad cannot be underestimated. Having Israel as a common enemy distracts from the enmity that many Syrian groups have for one another and for the minority Alawite rulers. But further, a peace deal with Israel that has any lasting effect would need to account for how to deal with Palestinian refugees currently living in Syria. If Syria were to formally integrate Palestinian refugees, there may be significant demographic implications that some analysts suggest could lead to the federalization of the Syrian state.
  
  

Nov 3 2008

As someone said on the Sunday talk shows this morning, the victorious new President, whomever it may be, will probably wake up Wednesday morning and ask for a recount. Here are a few of the things he'll have to worry about:

• Figuring out how to heal the deep divisions within this country. We put this above even the economy because the last 8 years reminds us of Oliver Hardy's (the "Hardy" of the old comedic team Laurel & Hardy) favorite saying: "This is a fine pickle you've gotten me into." On every front, from foreign policy to the economy, Americans are going to have to come together to get us out of this pickle. Yet, this election has been pure poison, particularly in the blogosphere, talk radio (and TV), in the letters pages in local papers and most frequently in email chains that are completely inaccurate and inflammatory to the point of encouraging violence. Truth appears to mean far less than vitriol. Ignorance has trumped reasoned discussion. Yet, no matter who is elected, he will have to reach out to what in either case will likely be very poor losers. He will not just have to be inclusionary but will have to motivate and inspire. That will require a person of superhuman strength and patience.
  
  
• Fixing the economy. The GPB has talked about the disaster of the US economic fundamentals for 2 years. CNN Money has published (see today's US Key Articles) a very easy to understand article that presents five key measures of economic fundamentals that support the arguments the GPB's been making about the economy. Yet, the new President will have to deal not just with the US economy but with the infinitely complex economic and political relationships that compose the "global economy." These relationships which have appeared and matured in just the last 30 years (as CNN Money says, the pre-1980 economy doesn't exist any longer), have rendered the tool kit (particularly the Fed's tool kit) that stood America well in most of the 20th Century essentially useless.
  
  And things are likely to get worse before they get better. We still have $500 trillion (more than 12 times the global GDP) in derivative contracts of various types floating around out there. We face global asset devaluation in the near term and then global inflation caused by money printing on the part of many governments. We're beginning to see commodity defaults where companies at risk simply walk away from agreed upon commodity contracts...an event likely to cause havoc with global commodities markets. The list goes on. But a new President will need to first assemble the minds that can just understand the new global economy before he can even begin to craft solutions.
  
  And then, beyond the fact that the old tool kits such as adjusting interest rates are less effective then they once were, the new President will be hamstrung by a deficit that's approaching the size of the US GDP. The 2009 deficit some analysts are suggesting will itself approach $1 trillion. Certain policy makers are saying "deficits don't matter" until the consumer starts spending again. But since there's no free lunch, it means printing money...and 12-24 months from now, that's going to come back and haunt us as inflation, which will further stress the middle class American consumer.
  
  
• Rebuilding America's influence overseas. This task is far more complex than reversing the disastrous policies of the last 8 years. It will require first a repaired economy. But then, the new President will have to understand how the new multipolar world works. He'll have to learn what General Petraeus has learned the hard way...that there are very strict limits on what a traditional military can achieve. He'll need to maneuver in a world where non-state actors such as religious or political movements have learned to turn the strengths of a superpower against itself; where Democracy can be the greatest weapon of Islamists; and where a superpower attempting to occupy even the most backward nation can be politically and economically bled to death by even the most primitive faction.
  
  
• Digging us out of the energy hole we've been in for 150 years. As most analysts understand, the three most dangerous words in the English language are "drill baby drill". As oilman T. Boone Pickens says quite accurately, our dependence on oil has resulted in the greatest transfer of wealth in the history of mankind...and, we can't drill our way out of this one. Our dependence on fossil fuels has spawned al Qaeda and the Jihadist movement. It's the root cause of instability in the Middle East and continuing conflict among nations hungry for energy. Of course it does have is upside for those of us in living in the Rocky Mountains...ultimately global warming will let us have the mountains and beach front property.  Interestingly, this may be the easiest problem to solve. It's only partially a technology problem...within 5 years most analysts suggest we'll have a workable alternative to gasoline or perhaps even internal combustion engines (if you listen to venture capitalists it's even sooner). That then makes the solution one of building infrastructure for new energy supplies and managing the industrial dislocations that occur when a new technology moves out an old one.
  
  
• That brings us to the most difficult task of a new President...getting Americans to make the sacrifices necessary to fix our problems instead of leaving them to our kids. As New York Times columnist Tom Friedman said in his column this morning (see today's US Key Articles) both candidates "continue to suggest that [fixing our problems] will be largely pain free." It won't. The last time the US population sacrificed to a meaningful extent was when the Greatest Generation pulled together for the victory in World War II. Yet, in many ways, while WWII required the greatest of human sacrifices, it was strategically far simpler to win than the battle with today's economic and global geopolitical problems. Today's problems will not require the human sacrifice in lives, but resolving them will require financial sacrifice and political compromise, two patriotic virtues in very short supply these days, particularly within the Baby Boomer generation. The accounting community serving the high flyers here in Aspen has been warning for months that regardless of whether McCain or Obama is elected, taxes on the wealthy will at least be returned to Reagan/Bush 41/Clinton levels. It's not a choice for either man but a necessity dictated by circumstances and the excessive spending of the last 8 years. And, that won't be all. Regardless of who is elected, the wars in Iraq and Afghanistan will have to be ended and there will be little choice but to cut the military budget by a significant amount. For those concerned about "socialism", you shouldn't worry...there simply won't be enough money for it.

Oct 26 2008

Buy the American stock market, but not yet.

Let's make one thing clear right off the bat. Warren Buffett is a lot better investor than any of us at the GPB. But his recent push to get Americans to buy back into the US stock market troubles us.

It's not time to buy US stocks and won't be until a new President, whether Mr. McCain or Mr. Obama, proves he can put cash on a continuing basis into the pockets of a dwindling middle class consumer, the historical driver of the American economy.

When Mr. Buffet began his investing career in the mid-1950's, the United States was on the cusp of the greatest period of economic growth in history. We had two tremendous assets to build and sustain our economy: 1) The Greatest Generation, a generation that had direct experience with the Great Depression and understood the importance of investing, building assets and saving; and, 2) the Baby Boomer Generation, a bubble of well educated, productive individuals who consumed everything in sight. Together, these two generations gave the US economy money to spend and ultimately the proclivity to spend it all.

The US had as Mr. Buffett mentions its recessions, inflation, oil shocks, political trauma and military conflicts, but it always had a huge safety net...the US economy was always rescued by a population of people who amassed savings and ultimately sustained national economic growth by spending.The problem is that these pillars of our economy are essentially kaput, the victims of a demographic time bomb, cultural change, bad economic policies and the curse of living too long too well. In the simplest terms, there's no one with any money in the prime spending demographics coming up behind the boomer generation to buy the stuff we've built or utilize the capacities we created.

First, let's look first at simple demographics. The US Census Bureau estimates that between 2010 and 2050, the population of what they term "non-Hispanic whites only" age 20-59, the wealthiest and most consuming segment of the US population, will decline (both sexes) by 12.05%...an absolute shrinkage of more than 13 million people. That's a shift of earthquake proportions. It means lowered demand for housing by several million units and it eliminates tens if not hundreds of billions of consumer spending annually from the economy.

Second, do remaining Americans in any middle class demographic have any money to spend? The answer is no.

The Greatest Generation saved, with Personal Savings Rates when Mr. Buffett was starting out in the 50's, 60's, 70's and early 80's ranging from about 7% of Disposable Personal Income more than 11% (1982). Beginning in the mid-80's, as Baby Boomers began to spend everything they earned, savings rates fell from roughly 10.8% in 1984 (depending on the measure one uses) to 0.4% in 2007. By one measure, the US Personal Savings Rate dipped into negative territory in 2005 for the first time since the Great Depression.

These days it takes the average middle class American two days to a week just to earn enough after bare necessities to buy a movie ticket (go to www.disposableincome.net to calculate how long it takes you to earn that movie ticket).

Moreover, expectations of a baby boomer windfall from inheritance have fallen dramatically from above $100,000 down to below $50,000 or lower as members of Greatest Generation live longer and spend their money on health care. And these numbers don't take into account any of the recent housing and stock market declines.

All this plus the recent credit crisis, Wall Street fall, and substantial new job cuts have taken a significant toll on consumer confidence with the Conference Board Consumer Confidence Index plummeting from 61.4 in September to 38 in October, its lowest point since the index was started in 1967.  This in turn bodes horribly for the Christmas shopping season, which in turn will put significant pressure on economic activity for the first half of 2009.   

Mr. Buffett has admitted he can't predict the timing of a stock market rise. That's good because the policies of a new President, something we'll see in the earliest days of the next Administration, will greatly affect recovery of the market. We've more or less addressed the credit crisis. But freeing up credit, while critical, won't fix the fundamental crisis of consumer spending which drives about two thirds of the US economy.

Fixing consumer spending means very simply getting money into the pockets not of the wealthy but the middle class who will spend it. One-time stimulus programs simply don't work. The answer: It's the jobs, stupid.

The best paying middle class jobs, those that ripple strongly through the entire economy are found in manufacturing, energy production and construction. Over the short term we're not going to replace US manufacturing. Energy production has already been aggressive as the Bush Administration has leased record onshore acreage. But with the fall in energy prices companies are already beginning to cut back on future drilling budgets.

That leaves construction, which has driven most of America's growth spurts and recessions over that last 50 years. Construction is in trouble and has significant spare capacity. New York Times columnist (and now Nobel laureate) Paul Krugman got it right in a recent column when he advocated "some serious infrastructure spending". But "serious" infrastructure spending in a nation with by many estimates $1.6 trillion in transmission, road, bridge, water and sewer upgrade needs is not what the current candidates have in their platforms (Obama plans $60 billion over ten years, McCain doesn't say). If infrastructure driven construction is going to rescue middle class consumer spending, it's at least a decade-long $100 billion/year dollar commitment starting right now.

In March of this year, we projected a fall of the DOW to the low 8,000 range by late 2008 based primarily on the perfect storm of a declining middle class with no more money to spend. We've written recently that without a serious effort by the new President to create long-lasting middle class jobs at the high end of the wage scale, we'll experience a new DOW drop to the 6,500-7,000 range. With a serious infrastructure program, we should see the DOW begin to recover, perhaps not to past levels but at least into the 12,000 range, which many analysts believe is sustainable. One caveat here is that we're now tracking an inflation pattern that (as we print money to deal with the credit crisis) may well kick in regardless of where the DOW is in 18-24 months. More on that in coming weeks.

If you can survive through another 1,500-point drop in the DOW, follow Mr. Buffett's advice now. But if you cannot, you might want to see if a new Administration is serious about rescuing the middle class consumer, the driver of this economy, before you jump back into a very fragile stock market. ..

Oct 21 2008

Peace may have a chance in Lebanon

Conventional wisdom is that conditions on the ground in Lebanon are poor, if not worsening.

Syria has amassed troops along the northern Lebanese border in response to the recent bombings in Tripoli and Damascus. The key Syrian worries: 1) The rising risk of armed Sunni militias based out of the Nahr el-Bared Palestinian refugee camp; 2) the political stalemate (which still continues) that led to Hezbollah's armed protest in Beirut last May; and, 3) the increasingly hostile rhetoric between Israel and Hezbollah, which threatens the current security status between Lebanon and Israel.

Yet, while many political analysts believe the crisis in Lebanon could lead to conflict, others are encouraged by last week's announcement that Syria will establish a permanent embassy in Beirut. Western nations have praised the move and have suggested that it may mean an end to Syria's covert actions to destabilize Lebanon.

As importantly, a recent poll commissioned by the International Peace Institute (IPI) and conducted by Charney Research suggests that conditions on the ground could in fact be conducive to peace and that diplomacy now may actually achieve more than previously thought.

The Lebanon Public Opinion Survey shows that a strong majority of Lebanese citizens (74%) actually have a positive opinion of the UN. Eighty percent approve of the United Nations Interim Force in Lebanon (UNIFIL) -- the peacekeeping force that monitors the ceasefire with Israel and aids the Lebanese Army in re-establishing its authority in Southern Lebanon.

These numbers suggest there may well be support for the UN's mandate to implement peace agreements with Israel and create a peaceful border with Syria by bolstering of the Lebanese Army and, most importantly, disarming Hizbollah. Moreover, the same poll suggests a majority (55%) of Lebanese are concerned that Hezbollah's weapons make war with Israel more likely. Only 41 % believe that Hezbollah's weapons will deter war with Israel.

In fact, Hezbollah appears to have paid a political price for its armed take over rival parties' territories in May 2008. While Hezbollah may have gained some political leverage in Parliament, it appears to have hurt significantly its image among ordinary Lebanese.

Perhaps more surprising is that the Lebanese generally have a high opinion of the government led by President General Michel Suleiman and PM Fouad Siniora. Suleiman received a 75% approval rating and Siniora garnered a 54% positive rating. Lebanese also regard the current government and the Lebanese Army as legitimate rulers of Lebanon. Almost all Lebanese citizens (93%) are confident in the Lebanese Army's capacity to provide security and stability in their areas.

Undergirding the IPI study is a strong sentiment that the Lebanese people sincerely desire peace. Despite the fact that nearly all Lebanese (97%) registered hostility towards Israel, a two-thirds majority supports ongoing peace talks between Israel and Syria. .

Though peace negotiations are viewed favorably, minority factions within Lebanon will certainly oppose any move that may weaken Hezbollah. And, groups like Fatah al-Islam may categorically oppose a potential peace agreement with Israel on any terms.

Another issue that might incite violence is the creation of the International Tribunal to investigate the assassination of PM Rafiq Hariri. Though the Tribunal is generally supported by the Lebanese public, a number of powerful Lebanese special interests supported by Syria and Iran will oppose it.

Despite these risks, the IPI study suggests that the roots of a stable Lebanese state may in fact be taking hold. And since the Lebanese populace apparently has confidence in the UN and the Lebanese government, there are grounds to believe that stability in Lebanon is possible. 

For more information see the full Lebanon Public Opinion Survey. ..

Oct 15 2008

We used to have some influence in Latin and South America...whatever happened to the Monroe Doctrine?

From Mexico to Patagonia, and particularly in Latin America, the United States is finding it increasingly difficult to find friends.

In September, Bolivia and Venezuela expelled its US Ambassadors. Bolivia did so after the accusation by President Evo Morales that US Ambassador Philip Goldberg was fomenting revolt in the restive eastern part of the country. Venezuela followed suit out of solidarity. In retaliation, the Bush Administration moved to suspend trade benefits for Bolivia, thereby straining even more its relations with this former ally.

This incident is just an indication of a larger trend of anti-US sentiment that has been growing south of the border for a half decade. It can be seen in the actions and rhetoric of leaders like Evo Morales, Hugo Chavez, Daniel Ortega, and Raul Castro. Each of these men is a leader of Latin America's reemerging left. Each is a member of the Non-Aligned Movement (NAM). They have moved increasingly close to Russia and Iran.

Most of Latin America, with the obvious exception of Cuba, used to be clearly within the US sphere of influence. But no more. This month, the Venezuelan and Russian navies will perform joint exercises in the Caribbean. Bolivia has signed oil cooperation deals with Russia's Gazprom (Gazprom, by the way, today is in Alaska trying to secure an interest in Governor Palin's natural gas pipeline). Hugo Chavez is a frequent visitor to Iran and has requested help from Moscow to develop nuclear technology. Russia is in talks with Cuba to build a space center on the island (what kind of missiles will that space center have?). China has also been none-too-slow to build trade alliances ranging from multi-million dollar investments in Chilean steel to increased cooperation with Ecuadorian shipping to using its soft power to bring Costa Rica out of its alliance with Taiwan. Washington: watch out - this isn't all.

Most recently, the US financial crisis has had painful repercussions in Latin America with stocks in the region plummeting 20% last week, the largest drop in over a decade. The region's financial analysts and media have blamed the decline specifically and loudly on "contagion" from the US. This in turn has brought much (probably well-deserved) criticism from Latin American leaders and financiers on the policies and leadership of the US. Needless to say, this has diminished US influence even more.

Part of the problem is that for years, Washington and organizations like the International Monetary Fund (IMF) and World Bank rubbed the noses of southern neighbors in the dirt for corruption and lack of accountability. Now, the critique is being turned right back around. Some of the most pointed criticism has come from Brazilian President Luiz Inacio Lula de Silva: "We did our homework - and they didn't, they who've been telling us for three decades what to do."

Amid this financial crisis, another growing worry has been the decline of trade between Latin America and the US. Between 1997 and 2008, the total foreign direct investment in Latin America by the US has dropped from 30% to 20% of the total. American investment is being replaced by an increasingly dominant Russia and energy-hungry China. Russia especially appears to be an increasingly more reliable, cooperative trading partner, allowing a free flow of technology and ethics-free investment.

But even Iran is investing in Latin America, economically and politically. Iran, for example, recently began establishing health clinics in Bolivia.

At least as long as oil prices and Venezuela's production (which has been falling) hold up, Venezuela Hugo Chavez seems determined to replace the US as a traditional supplier of aid to Latin America. President Chavez with his liberal checkbook has established an oil-subsidy organization Petrocaribe eclipsing American aid for traditional Washington allies such as Honduras and the Dominican Republic. Interestingly, the United States, which is one of the only nations to buy Venezuelan crude at market prices, is subsidizing Mr. Chavez's regional largesse.

The American financial weakness and its impact on Latin and South America also is hurting the American "image". Pew Research Polls found that positive perceptions of the United States dropped significantly between 2002 and 2007 in 6 nations studied. The poll found, as in most other parts of the world, that President Bush was one of the least popular world leaders.

Perhaps because of the 24-hour news cycle and the Internet, media outlets are again turning public attention in the region toward the history of US "covert" activities in Latin America, in nations from Chile to Guatemala and Nicaragua to Panama. The US as whipping boy has been a godsend to anti-American leaders like Chavez who need to turn public attention away from domestic failings. The incompetence of US policy towards Latin America has also given Russian President Putin an opportunity to constantly pitch a pro-Russian message to the region.

As for the Monroe Doctrine, James Monroe, the fifth President of the United States is likely turning over in his grave. It was he who in 1823 established the concept of American hegemony over the Western Hemisphere. Whoever the next US president is, he will have to devote a considerable amount of energy tending to the loss of influence in Latin and South America. One thing is certain: the age of American hegemony south of the border has in all likelihood drawn to a close. ..

Oct 11 2008

When will the crisis end?

"Wild" understates the last two weeks of US and global stock movements. Friday, the DOW swung 1,000 points before closing at 8,451, down 128 points. Tokyo's Nikkei lost 9.6% and other Asian and South Pacific markets lost similar amounts. Today, global stocks are making up those losses after the G7 and Eruopean leaders took coordinated action to loosen credit that met at least the minimum standards required by stock traders.

Many analysts watching the US DOW are suggesting the floor appears to be roughly 8,000 (the International Monetary Fund said markets will fall further). The Global Power Barometer (GPB) predicted in March that the DOW would fall to the low 8,000 range in "the waning days of the Bush Administration."

But the real question is not how low the DOW will go in the next month, but where will it be in a year when the dust of the global credit crisis settles.

That obviously depends on the actions of a new US Administration. Right now, the wild swings are due primarily to a horrible market psychology. But it is possible to generally bound the October 2009 DOW.

Let's start with some assumptions. First, let's assume governments solve the credit crisis...albeit with new restrictions such as larger down payments for home mortgages and a lowering of credit card limits.

Second, let's assume the US follows the pattern of the last 8 years in which real median income for working age families continues to decline or stays flat and income disparity between the bottom 99% of Americans and the top 1% remains at levels which, according to the Economic Policy Institute, have not been seen since the late 1920?s. It's a reasonable assumption since neither party nor Presidential candidate have proposed programs that would raise the economic success of the vast majority of Americans.

If these assumptions hold through the first few months of the next Administration, here's what will happen:

• Housing prices will likely fall to around 130 on Standard & Poor's Case-Shiller Index (their 20-city composite was at 166 in the July), a level not seen since early 2002...meaning average housing values would fall another 15-20%.
  
  
• Consumer spending likely will decline and spending on non-essential items will plummet. According to the Federal Reserve, 2nd Quarter consumer credit dropped by a whopping 3.75% in August (before the crash) with a 5.4% drop in the category that includes car loans and a 0.8% drop in the credit card category. This is the first time in a decade that has happened and economists worry that consumer spending will follow and actually decline in the 3rd Quarter, the first time that's happened since 1991. None of this portends a good Holiday shopping season, which would be a significant blow to the 2009 economy.
  
  
• Consumer confidence won't turn around (Gallup presently has it at 2% positive and 83% negative). And following consumer pessimism, spending won't increase.

Oct 3 2008

Growing the middle class and paying them more...the other two legs to the rescue platform: 

Aa Wall Street bailout bill that will provide about $700 billion to buy toxic mortgage backed securities (and about $180 billion in tax cuts and pork) is now law. Politicians throughout Washington are congratulating themselves on a job well done.

But the job is not nearly finished...in fact, it's only about a third finished.

t's true the bailout will get credit flowing again, which is critical to keep debt-strapped businesses, governments and individuals afloat. But there are at least two other legs to this rescue platform that must be added if a long-term rescue of our economy?s fundamentals is to be constructed. Without all three legs, the rescue will collapse like a bad souffl? and the government will be out $700 billion with little or nothing to show for it.

The other two legs are: 1) Get dollars into the hands of the middle class so they'll buy stuff; and, 2) build the population in prime consuming ages so they'll be more people to buy stuff. Are these impossible tasks? Not at all.

The American middle class consumer is today in deep financial trouble. Savings rates are nil. Debt has skyrocketed. That means average middle class households have no money to buy anything. If they spend just what's left over after covering required expenses, an average middle class family has to work a week just to buy a movie ticket.

Most economists believe the way to put money into middle class pockets is not through a one-time minimal 'stimulus package'. It's putting people to work in stable high-paying jobs. What are those jobs? They are, very simply, jobs in construction, manufacturing and energy development and production. Not only do these jobs pay well themselves but each has a multiplier effect greater than 2.5 meaning that for each basic job in construction, manufacturing or energy, more than 1.5 additional jobs are created.

But how do we create these types of jobs? Unfortunately, though not impossible, it's unlikely in a globalized world that we'll quickly be able to revitalize the US manufacturing sector. That leaves construction and energy production. Over the past 8 years, we've seen an unprecedented boom in natural gas production, propping up the economies in many western states and now in many southern and Appalachian states as new natural gas fields are discovered.

That leaves construction. One way to restart America's construction industry would be a massive infrastructure revitalization program, a domestic "Marshall Plan" with one element a program similar to the Works Progress Administration (WPA) created in April 1935 by President Roosevelt to provide Depression-era employment.

The Urban Land Institute estimates the cost of modernizing America's infrastructure (e.g., roads and bridges, electricity transmission, water, sewer, schools) at more than US$1.6 trillion. Yet, while China spends 9% of its gross domestic product (GDP) on infrastructure development and India aims for 8%, the United States spends barely 0.93%, not enough to maintain America's infrastructure let alone modernize it.

Would the US have to pass another huge bailout bill allocating US$1.6 trillion of taxpayer dollars to fund infrastructure modernization? No. There are many options for financing infrastructure redevelopment. Alex Garvin, President of New York-based Alex Garvin & Associates and an adjunct professor of urban planning and management at Yale has proposed a public-realm endowment that would offer the income from the endowment to communities to cover the cost of planning, design, and engineering, provided they establish tax-increment districts that will generate income streams adequate to retire the debt on bonds that would finance public investment. Public Private Partnerships can also be used to finance infrastructure projects without significant public investment.

Most critical for the United States would be upgrading of the electrical transmission grid. The current grid in the US relies on 100-year-old technology and high voltage lines that were installed in the 1950's and 60's. When the grid fails as it did so spectacularly in 2003 in the Northeast, the costs can be staggering. Additionally, as T. Boone Pickens says in his ubiquitous ads, wind energy can supply 20% of America's power needs...but not without a tremendous upgrade of the transmission system. It is estimated that it takes more than 2 years on average to tie new wind generation into the grid.

Infrastructure redevelopment would start producing jobs on day one. Some estimate the jobs created by modernizing the US infrastructure to be in the range of 5-10 million, and these would be spread over the entire United States. And job secondary job creation would begin day one.

The final leg of the economic rescue platform is increasing the number of people in the high consuming demographic categories...primarily ages 20-59. Right now, the US faces a demographic time bomb similar to Russia in the past decade and Italy presently, with the most productive consuming populations of 20-59 year-olds (male and female) declining 12 to 17% between 1995 and 2050.

How do get more people into high consuming demographic categories (without waiting for them to be born and grow)? The answer is simple. Reform immediately immigration rules and regulations. Since 9/11, the perverse Bush Administration "war on terror" has resulted in the US turning away the most productive foreign students graduating with advanced degrees from American universities. And now, though many desire to stay in the US, their own countries can provide decent jobs so they don't fight to stay. The obvious solution, if we want to make up for the declining populations in our most productive consuming populations, is revise immigration rules and double annual immigration levels. That's the only way we'll find people to bolster the housing market over the near term.

Let's face it; since World War II the US has been the economic engine for the global economy. And, the US "middle class" consumer has been the driver of that economic engine with consumption composing about 70% of US GDP.

The bailout is fine but does little other than to free up credit and allow Americans to go further into debt. If the US economy is going to survive and grow over the long term, a broader rescue program is needed that brings provides more than a 33% partial fix. It requires the other two legs of the 100% solution...both building the numbers of the US middle class and putting more money in the pockets of consuming Americans through better, higher paying jobs.

Immigration reform and a domestic Marhsall Plan focused on modernizing badly failing US infrastructure are realistic, quick ways to accomplish this at a cost we can afford...

Sep 19 2008

The lunacy of NATO expansion: On October 5, 2007, the GPB wrote the following, "The lunacy of NATO expansion keeps rolling along as the US seems to be doing everything it can to tweak Russia into another cold war. "Unilateral, illegitimate actions have not solved a single problem. They have become a hotbed of further conflicts...One state, the US, has overstepped its national borders in every way." So said Russian President Vladimir Putin this week at a German international security forum. "The process of NATO expansion has nothing to do with modernization of the alliance or with ensuring security in Europe," Putin said. "On the contrary, it is a serious factor provoking reduction of mutual trust." John McCain, possible 2008 US Presidential nominee, who also attended, called it "the most aggressive speech from a Russian leader since the end of the Cold War." NATO expansion has two huge downsides. First, it splits the NATO alliance into old Europe who understands Russia and does not want to be dragged into confrontation with the newly emerging economic and political power, and the old Soviet states who specifically want to be defended by American military might funded by US taxpayers. Second, with an vastly overstretched military and an economy that will likely see a very significant downturn from mid-2008 to 2009 or 2010 (caused by the bursting real estate bubble, increasing commodity prices and the very dangerous risk posed by derivatives), NATO would be a paper tiger relative to Russian aggression in former states neighboring Russia. Watch for this drama to play out in Kosovo (where Russia will probably prove to be the paper tiger), the separatist states of Abkhazia and South Ossetia in Georgia (where energy transportation makes them "line in the sand" regions), and the Ukraine."

Republican Presidential nominee John McCain supports NATO expansion and when Russia did send troops into Abkhazia, South Ossetia and Georgia, his response was right in line with George W. Bush's brand of cowboy diplomacy. "We are all Georgians now," said McCain. Dimitri Simes, founding president of The Nixon Center, which is considered to be the "home think tank" of moderate foreign policy Republicans, was reported in Newsweek (see today's Russia Articles) to have said of McCain's statements on Georgia "What worries me is that Senator McCain did not talk to senior Russian officials.  I always thought if you're a combat pilot, you'd want to understand the enemy. But neither he nor his advisers are interested in getting the Russian side of the story."

But a more cool-headed experienced and educated Defense Secretary Robert Gates suggested at a Thursday dinner in England, according to the Associated Press, that "the world should keep its powder keg dry as it reckons with a newly assertive Russia."

Gates also made a significant strategic distinction that needs to be understood in any decision making with Russia. Gates said, "In reality, Russia's policies are borne of a grievance-based desire to dominate its 'near abroad' [meaning former Soviet states], not an ideology-based effort to dominate the globe. And Russia's current actions - however egregious - do not represent the existential and global threat that the Soviet Union represented."

Gates went on to encourage careful thought about expansion, particularly to states like Georgia where NATO membership could bring about a serious military confrontation. "We need to be careful about the commitments we make, but we must be willing to keep commitments once made," said Gates. "In the case of NATO, Article Five must mean what it says. As the allied troops fighting in Afghanistan can attest, NATO is not a talk shop or a Renaissance Weekend on steroids."

Gates went on to say that the tools short of military confrontation to influence Russian behavior are many and need to be used before two militaries face off. "With the added perspective of having signed nearly 1,400 condolence letters since taking this post [referring to the letters he's signed to the families of soldiers killed in Iraq and Afghanistan], I see no reason to change [the] approach now [of containing Russian aggression without military confrontation]."

Secretary Gates has wisely suggested strategies such as putting on hold Russia's bid for membership in the World Trade Organization and the Organization for Economic Cooperation and Development. Gates has also helped rally global condemnation for Russia's actions in Georgia...condemnation that has been felt in Russia according to many analysts.

We believe what many global strategists and analysts have written...that NATO expansion has weakened NATO and added responsibilities that can't be met. But at the least, we hope this Administration and future Presidents heed Secretary Gates' call for careful consideration of how NATO is expanded.

The Financial Crisis: We're only at the 5th inning: The US has proposed the largest bailout of corporate incompetence perhaps in history. While pundits and the government have estimated the cost of the bailout at about US$1 trillion, more candid analysts suggest the cost will be closer to $2.5-3.5 trillion. NBC Mad Money host Jim Cramer, a frequent Administration critic, has complimented the new bailout plan. And, many analysts agree with Mr. Cramer that while the bailout is undesirable, it is necessary.

The GPB may agree that no action could well have caused a depression. Yet, we question whether the bailout will actually accomplish anything over the long term beyond plunging the US deeper and deeper into debt, particularly when combined with off-book continuing war costs. The GPB forecast the housing crash 3 years ago for its private clients and has raised warnings for 2 years on the GPB. As we wrote on September 10, 2007, "[The housing crisis is] not one that will end quickly as the overstressed US consumer collides with an overbuilt US real estate market and a US demographic trend that is seeing a dramatic decline (about 16.5%) in prime purchasing power segments of the population. In other words, as we enter a period of overbuilt housing, no one is coming up behind the baby boomers to buy the houses the boomers have built, at anywhere near the prices paid."

On March 18, 2008, the GPB provided 8 reasons to expect big economic problems and the possible collapse of the financial industry in early 2009 (so we missed it by a few months). The problem is that even with a multi-trillion dollar bailout, the US won't have addressed the underlying causes of the housing collapse, the potential risk associated with the massive amount of derivative contracts, the loss of our middle class or the off-book drain of the Iraq war and other US misadventures across the globe...like the NATO expansion.  US Treasury Secretary Hank Paulson on the Sunday morning talk shows provided no reasonable assurance that taxpayers weren't at huge risk or that the bailout would fix anything but the maintenance of credit markets (an important accomplishment but not one that fixes fundamental consumer problems). 

Unfortunately, we can't look for a new President, regardless of political party, to be able to successfully reverse the mistakes of the last 30 years (and particularly the last 8) in 4 or even 8 years. America needs to face the fact that resolving these problems is going to take massive sacrifice over the next decade or longer. ..

Sep 12 2008

Editor's Note: The GPB has covered the pipeline politics of the Caucasus and Eurasia continually over the last year. As we wrote about Georgia last winter we suggested energy transportation would be a key factor in Russia drawing a line at Western influence in Georgia and that it could result in Russian military action against Georgia. The GPB believes Russian dominance in energy transportation of Russian and Southeast Asian gas to Europe will continue to be an under reported but critical influence on many global issues. This Observation, by GPB staff member Chris Herbert, continues the effort by the GPB to raise this critical issue.
 
The Nabucco Pipeline - Pipedreams and Pipe-Realities of the Caucasus

Whether you follow the geopolitics of oil and natural gas or not, most people know that a very few countries control most of these precious resources despite the fact they are critical to every human being on earth. And those nations have taken every opportunity to leverage that control both to maintain high prices and increase their global political influence. No greater example exists than Russia's "energy stranglehold" on Europe.

Russia's energy policy is completely pragmatic and designed to achieve one goal - a continuing dominance over Europe's energy supplies, particularly natural gas. Since the fall of the Soviet Union, and under the leadership of Vladimir Putin, Moscow has focused on building its oil and natural gas transportation industry, strategically developing and controlling pipelines that ensure European dependence through plentiful supplies, at manipulated prices, transported by Russian-controlled routes. To date, while Europe continues to seek energy supplies that avoid Russia, they have been singularly unsuccessful in breaking the Russian transportation dominance. Some countries, such as Italy, have resigned themselves to the Russian supply monopoly and only Ukraine and Belarus have mounted serious resistance - resistance that has led to Russia threatening to cut off supplies at various times over the past two years.

Europe of course continually develops plans to end Russian energy dominance. The currently favored alternative is the Nabucco Pipeline, named for unclear reasons after an opera by Giuseppe Verdi. The project would ultimately connect Turkmenistan's gas fields to Central Europe via a series of new pipelines under the Caspian Sea and through Turkey but also relying on the existing Baku-Tblisi-Erzurum Pipeline running through Georgia. The pipeline if built would be 3,300-kilometres long (2,050-mile) with a final destination of Austria. But there are problems. Will Nabucco be built and at least partially free Europe from the Russian transportation monopoly?

Not if Iran and Russia have anything to do with it, as frequent GPB contributor Kaveh Afrasiabi wrote this week in the Asia Times (see today's Russia articles). Most likely, you'd have to pry permission to build a competitive pipeline under the Caspian from the hands of Vladimir Putin. But the most immediate impediment to the Nabucco plan is the current geopolitical situation in Georgia. More than a few analysis see Russia's recent intervention in Georgia being about more than just a generic national struggle against a former Soviet state aligning itself with the West. Many of those analysts believe Russia sees its all important energy dominance threatened unless it can replace Tblisi's government with one more amenable to its energy transportation policies.

In this pragmatic self interested view, PM Putin and President Medvedev believe a Russia-friendly Georgia could delay or stop the US-EU-planned Nabucco and ensure the dominance of the massive "South Stream Pipeline", a Gazprom (the Russian energy giant) driven project agreed upon between ENI Chief Executive Paolo Scaroni and Gazprom Vice-Chairman Alexander Medvedev last year and traveling from Beregovaya in Russia under the Black Sea potentially through Bulgaria to Serbia and ultimately to Italy. South Stream would significantly increase Russia's transportation leverage and, as an added bonus, it would circumvent current routes through the less-than-cooperative Ukraine.

Just how far Russia will go to advance its plan was clear when President Medvedev 2 weeks ago defined 5 Russian foreign policy strategies, which included defense of its "privileged interests" including energy and its announcement that Russia considers key neighboring regions special Russian "areas of influence" that it will defend. Coincidently, these areas coincide very much with energy transportation corridors.

The Nabucco Pipeline, therefore, seems like something more akin to a "pipedream." The existing Baku-Tblisi-Erzurum Pipeline that would make up a great deal of Nabucco, is of crucial importance and a pro-Russian government in Georgia at any point could clearly stop Nabucco shipments or impose high tariffs for the Georgia portion of the pipeline.

Additionally, there are a number of other impediments to the realization of Nabucco. Iran has continued to express its opposition to laying any pipelines under the Caspian. While Turkmenistan has expressed interest in forging partnerships with the West and China for the development of its resources, it has so far been loath to rile Moscow. Azerbaijan has been traditionally closer to Russia than the West and if pressed they likely will bend to Moscow's point of view. As Afrasiabi points out, the last thing Baku wants is a similar Russian invasion in its own territory, particularly given its own breakaway region of Gharabagh. Indeed, as John Helmer of the Asia Times jokingly put it a year ago when comparing it to Verdi's Nabucco: "Never mind the encore - this Nabucco won't make it to overture". (see today's Russia articles)

Nonetheless, the Nabucco project CEO, Reinhard Mitschek, said September 5 that the Russia-Georgia conflict had 'no impact' on his plans, and that the pipeline would be completed by 2013. In early September US Vice President Dick Cheney visited Azerbaijan and Georgia and gave a hawkish speech expressing the "abiding interest" the US has in the security of the Caucasus. This was hardly a coincidence and probably had less to do with democracy than energy transportation politics.

Though the West says Nabucco's plans have not been affected, analysts are skeptical particularly given Russia's own "abiding interest" in South Stream. With Russian troops remaining in Georgia-proper for another month, and in Abkhazia and South Ossetia indefinitely, it is safe to say that pressure will continue on Nabucco, and the pipeline will remain a pipedream, held hostage to factors far beyond the simple demand for energy.

The victims in these pipeline wars are the European consumer and Europe in general. But the effects impact the US and the global balance of power. Given the threatened cuts due to previous winters' disputes between Russia and Belarus and Ukraine, energy-hungry Europe is eager to find a way around the Russian transportation monopoly. But for now, Russia has the upper hand and some European countries, like Italy, are internalizing that fact. But until Europe does find a way to free its energy future, pipeline politics will play a huge role in the relationships among Europe, the United States and Russia on a very broad range of issues...

Sep 4 2008

The spinning compass of Syria's foreign policy...what direction next?

Syria has always been considered by the international community to be a pivotal player in Middle Eastern affairs. And since there are indications that the regime in Damascus is currently undergoing a serious political transition, analysts are scrambling to make sense of its adoption of new foreign as well as internal policies - the problem is that these policies appear contradictory:

Arab Champion but Pro-Iranian: Syria is maintaining a strong alliance with Persian, Shi'a Iran. Some analysts go so far as to suggest that Damascus is becoming merely an appendage to the Iranian foreign policy in the region. At the same time Syria as a whole is an Arab, majority Sunni state run by a secular Ba'ath regime in Damascus, which currently heads the Arab Leaders' Summit. Long ostracized by its Arab neighbors (Syria is hardly on talking terms with both Saudi Arabia and Egypt), there is evidence that Syria is making a concerted effort to re-engage with its Arab neighbors and to champion its Arab identity.

Peace with Israel and Partnership with Hizbullah and Hamas: Presently, Syria is engaged in indirect peace negotiations with Israel via Turkey and to a lesser extent France. It would appear that Damascus is trying to find a way of recognizing the state of Israel all the while extending political as well as material support to both Hizbullah and Hamas (organizations which not only do not recognize the state of Israel, but have the declared intention of destroying it).

US, Russia or Both: Syria insists that the US should extend its patronage to the Syrian-Israeli peace negotiations; in fact, some analysts argue that peace with Israel is Syria's only means of improving relations with the US. Meanwhile, knowing only too well the increased tension between the US and Russia over Georgia, President Bashar al-Assad while in Moscow offered to host Russian missiles on Syrian territory, as well as offer the Tartus Syrian port facilities on the Mediterranean to the Russian Navy. It is worthwhile noting that this contradiction may be less an indication of al-Assad playing both international sides against each other, and more an attempt to balance power struggles within his own house. The euphoria felt by his Generals and Ba'ath Party old-timers at the possible return of the Cold War is causing them to press al-Assad to re-engage with Russia, while a new breed of Syrian diplomats are heavily advocating for negotiations on the return of the Golan Heights to Syria, which can only be guaranteed by American involvement.

There is one constant however to new Syrian policy. While the security of the country is firmly held in the grasp of the President's brother Mr. Maher al-Assad and his brother-in-law Mr. Asef Shawkat, the maternal side of the President's family, the Makhloufs, are primarily pressing for the liberalization of the Syrian economy. This is not without self-interest as the Makhloufs already possess a business empire that would significantly profit from expanding the base of the middle class and business community in the country. It is perhaps a small irony that the referential model for Syrian expansion, in light of its authoritarian one-party political dictatorship, is more akin to a liberalization "a la Beijing" style rather than a truly American open market. However, Syria is not China and its brittle economy is starving for foreign investment. That investment most likely will come by way of Washington but could also come by way of both Beijing and Moscow. How much Syria is willing to trade its political structure for more economic success is still an unknown quantity.

To forecast the future direction of Syrian international policy, two issues need to be taken into account: Iran's regional influence and Syrian domestic politics.

So far, Iran has ignored the Syrian-Israeli peace negotiations, due to its firm belief that Syria will never get what it wants from Israel, namely the whole of the Golan Heights to the shores of Lake Tiberius. But what if Israel does comply with the Syrian demands and peace actually appears on the horizon? There is real possibility that Iran will it try to contrive a crisis with Israel (through Hizbullah perhaps) to spoil the chances of a peace treaty. It would be logical to assume that a Syrian-Israeli peace agreement would call into question the viability of Hizbullah's armed presence in the region. It is hard to believe that Iran will simply lie down and allow its asymmetrical deterrent of regionally armed allies, a factor that greatly undergirds its strategic position, to be dismantled.

Secondly one must ask: Is peace with Israel a favorable option to the regime in Syria? The legitimacy of the Ba'ath regime is based upon its opposition to Zionism and the US as well as its socialist economic structure. This latter positioning is already greatly challenged by the endogenous pressure to liberalize the Syrian economy. Thus peace with Israel and closer ties with the US could call into question the raison d'etre of the Ba'ath regime's existence. Moreover, the contemporary phenomenon of a Syrian Arab renaissance, with the final dropping of the Arab unity fig leaf, could be definitively disenfranchised.

Presently, the al-Assad regime may consider itself lucky that the only organized and effective opposition comes from the Muslim Brotherhood, which one could argue accepts Mr. Assad as the lesser evil to greater chaos; but the Brotherhood could change its position and challenge the regime's monopoly on power if al-Assad were to reach peace with Israel. Losing the unifying force found in Israel as a common enemy coupled with rising economic openness could reveal latent rifts in Syrian society. A probable end to this crisis would see al-Assad's empire divided and his power usurped by the division of the country into a loose federal structure: an entity in the north centered around Aleppo for the various ethnic and religious communities; an entity from Homs towards the south; a Sunni entity centered around Damascus; an entity on the Mediterranean and the Alawite mountains, for the Christians and the Alawites; as well as an entity in the south of the country, centered around Horan, for the Druze and other minorities. So President Bashar al-Assad's willingness to truly make peace with Israel must be assessed in light of these risks. It is, therefore, difficult to believe that he will authentically pursue peace under such prospects.

Given these issues, the components of Syria's contradictory foreign policies are almost mutually exclusive. For al-Assad, the prospect of peace with Israel rather than being a plus for a newly emboldened and strong Ba'ath party, will actually call into question the legitimacy and ultimately the longevity of the regime. In light of recent events in Georgia, Syria may be even more compelled to disengage from peace negotiations with Israel and its policies of westward engagement.

Khairi Janbek, 49, worked as Deputy Director at the Royal Institute for Interfaith Studies in Amman, Jordan. He was Special Advisor at the Jordan Institute of Diplomacy, Press Secretary to the Former Crown Prince of Jordan, and private advisor to Prince Hassan bin Talal of Jordan. He has been a columnist at Jordan's political, economic and cultural weekly, The Star...

Aug 28 2008

Looking through the darkly glass: Avoiding a new cold war

Russia's decision this week to recognize the independence of South Ossetia and Abkhazia has raised the stakes in South Caucasus, not only for Russia and Georgia, but also the US and NATO.

In terms of global strategy, the Georgia crisis is a microcosm of a broader reality that belies the optimistic premise of a post-cold war order that would no longer be riveted by competing military alliances. Today, the avalanche of US commentaries on new US-Russia tensions don't get the fact that the greatest legacy of Ronald Reagan - ending the Cold War...may well disappear in the fog of a "new cold war."

The past harmony of US/Russian relations is quickly disappearing. In a move that will infuriate the Russians, the Bush Administration has chosen to send its chief Russia hawk, VP Dick Cheney not just to Georgia but also to Azerbaijan as well as to Ukraine. US warships are anchoring off Georgia under the banner of providing humanitarian assistance. The US and Poland have finalized an agreement on the deployment of interceptor missiles, warranting a threat of military retaliation by a senior Russian general. And, the West persists with its plans to offer Georgia and the Ukraine NATO membership.

Russia clearly shares the blame and risks greater confrontation if it violates the Georgia ceasefire. But unless Washington and Moscow patch their growing differences, the Georgia fall-out will likely include setbacks on a broad range of issues, including the Agreement on Civilian Nuclear Cooperation, Russia's participation in the Threat Reduction Program, the future of SALT I agreement (due to expire in December 2009), US/Russia's WTO-based trade negotiations, and an array of other regional and global issues.

A September litmus test for whether the US and Moscow can resolve their differences is the United Nations Security Council debate on new Iran sanctions. Russia as China has been reluctant to agree to tough new sanctions against Tehran for its nuclear program. Moscow must now decide between its prior commitments to the "Iran six" (i.e., Security Council's Permanent Five plus Germany) and the opportunity for closer relations with the Islamic Republic - a country that happens to share Moscow's security concerns about America and NATO.

If pushed, Russia could go beyond vetoing new sanctions. Moscow might consent to Iran's inclusion in the Shanghai Cooperation Organization (SCO). In turn, Iran might facilitate Russian military presence in America's traditional Persian Gulf turf. Russia will almost certainly take this course if the US and NATO proceed to include Ukraine and Georgia. To paraphrase a Russian general, "Devilish" moves on Russia may elicit a more aggressive counter reaction by Moscow that would directly challenge the US in its current spheres of influence. That, in turn, could well set off a new arms race in the Middle East with Russia selling of sophisticated armament to countries such as Syria and Iran.

That's not all. Russia could renew historical ties to Cuba, Venezuela, Nicaragua - all countries closer to US territory with a long list of complaints about US interventionism. With the Russian press complaining loudly that the US is attempting to turn the Black Sea into "an American lake," and the US unwillingness to flinch from tightening the security belt around Russia, the Kremlin leadership will no doubt explore all available options.

And, of course, Russia could eventually play real global hardball. Russian PM Putin could go so far as to threaten US-supported pipelines in the region (e.g., the Baku-Tblisi-Ceyhan or BTC). It could substantially increase Russian naval presence in the Black Sea or coerce small Baltic nations, causing the US to further stretch its already overcommitted armed forces. But in the toughest of all payback moves, it could covertly arm the Taliban currently fighting the NATO forces in Afghanistan. It would be truly ironic if the Russians broke the back of the American empire using Afghanistan as the tool.

Meanwhile, Moscow has pinned its hope on a new European security strategy triggered by the Georgia crisis. Its goal is to de-center NATO and place Russia more organically in the Europe's security calculus by formulating a new framework for EU-Russia cooperation. Russia would utilize the OSCE (Organization for Security and Cooperation in Europe) as a security interlocutor between Russia and the European Union (EU).

Clearly, the success of Russia's US strategy depends in no small degree on Moscow's ability to convince Beijing about the American threat. Beijing's economic interdependence with the US prevents a full-scale partnership with Russia (the SCO this week somewhat rebuffed Russia and urged a peaceful resolution of the Georgia issue), but with US overreach in the region, it is not unrealistic that the SCO could evolve as a counterbalance to NATO.

The Georgia crisis has been a wake up call to many Europeans who are now weary of provocative moves by the US and NATO imperiling Europe's peace and security. This pits traditional Europe against new EU members in Eastern Europe who seek a US taxpayer-funded protective shield. As public opinion galvanizes in such countries as Spain, Germany, France and Italy (where the Bush Administration is reviled) by the fear of a new trans-Atlantic rift, serious disagreements between Europe and the US may appear that threaten the very fabric of NATO.

Indeed, Europe's current "Obama mania," may well be linked to the widespread European perception of the US as a superpower addicted clumsily to hard power. Partially as the result of Russian's counteroffensive in the European press (e.g., President Medvedev's opinion article in Financial Times - see today's Russia articles) few Europeans believe the US analogy of Russia's gambit in Georgia to the Soviet invasion of Czechoslovakia in 1968. And Russia has not played all its political cards. Russia has yet to remind Europeans that President Bush reneged on the pledge by his father to the Russians regarding NATO's expansion, or that the Russia suspended cooperation with the Force Reduction Treaty simply because it allowed disproportionate military force to individual NATO countries.

Serious adjustments in US policy toward Russia are needed. A new US President should consider Russia's concerns and be sensitive to the risks of NATO expansion not just to relations with Russia but also to the internal unity of NATO in the post-Cold War era. NATO's role should be one of improving security not pushing Russia and China into another cold war.

The new US President must not let the jolts of the Georgia crisis prove to be the precursor of major earthquakes in global geopolitics. Despite the work of historians to explain the mistakes of the past, many leaders don't learn. Not applying the lessons of the last cold war will surely result in the destruction of the Reagan legacy and create a world of immeasurable new danger.

Kaveh Afrasiabi, a frequent GPB contributor, is a prolific writer and political scientist who has taught at Tehran University and Boston University, has done research at Harvard, UC Berkeley, and the Institute For Strategic Studies (Paris), and has worked with UN. He is the author of numerous books and is a columnist whose writings appear regularly in publications as diverse as the Asia Times, the New York Times, the International Herald Tribune, Middle East Journal, and others. His upcoming books, to be published this Fall, include "Reading in Iran Foreign Policy" (co-authored with Abbas Maleki) and "Looking For Rights at Harvard."..

Aug 25 2008

Iran and the United States: Could they be natural allies?

The US and Iran are natural allies. Angry verbal exchanges notwithstanding, geopolitical dynamics present both countries with common interests and enemies, as they did many years ago when Washington and Tehran cooperated closely in the region. Elites and ideologies pose obstacles to renewed cooperation, but if there is to be stability in the region, the two nations must work together on political development in Iraq and on countering the Taliban and al Qaeda in Afghanistan.

Iraq

In the last few months, the US and Iran have been less antagonistic and, without apparent coordination, have brought about a level of stability in Iraq that was unthinkable a year ago. The two powers have been successful in greatly reducing sectarian warfare: the US (and Saudi Arabia) in the Sunni center, Iran in the Shi'a south.

Iran has failed to drive the US from Iraq by directing Shi'a militias to attrit US forces and thereby undermine American support for the war. Iran now uses its influence with Shi'a groups to stabilize Iraq. Shi'a militias have conspicuously refrained from engagements with Sunni counterparts, US troops, and each other, which has reduced fighting far more than has anything associated with General Petraeus's surge. Stability has enabled Iran to urge Shi'a parties to press for a US departure, which Washington has long promised once stability is reached.

Rather than working on separate though complementary efforts, the US and Iran must cooperate formally and directly. They can press Shi'a and Sunni to form a coalition government or negotiate a federal system. Cooperation can perhaps even bring about the stated goal of US policy - a viable representative government in the region - as authoritarian, sectarian rule is no longer possible.

Afghanistan

The US and Iran have been pursuing similar goals in Afghanistan for decades. Iran provided sanctuaries for and supplied the mujahideen in their war against the Soviet Union, and has long opposed the Taliban, which massacred thousands of Shi'a, including several Iranians, around Mazar-e-Sharif in 1998. Iran helped oust the Taliban three years later, supports the Karzai government, deported militants such as Gulbuddin Hekmatyar (curiously, once a CIA protege; now an al Qaeda ally), and administers development programs in western Afghanistan. (Accordingly, reports that Iran supplies the Taliban are unconvincing claims at best, manipulative propaganda at worst.) As the Taliban reasserts control over large parts of the south and over Pashtun and other enclaves in the north, and as NATO commitment waivers, the US cannot afford to shun cooperation with anyone.

Events in Pakistan may make cooperation a necessity. Pakistan is becoming increasingly unstable, not only in the tribal areas along the Afghani frontier, but throughout the country as well. Islamist parties and movements are on the rise. The Taliban (both Afghani and Pakistani franchises) and al Qaeda are poised to cut off US/NATO supply lines running from the port of Karachi, through the narrow passes along the frontier, and into Afghanistan. Taliban and al Qaeda fighters will seek to close the passes; allies in the large Pashtun refugee population in Karachi will attack logistical facilities there. Iranian roads are the only alternative. They are quite far from Kabul but close to US logistical bases in the Persian Gulf.

Collateral Benefits

Aside from cooperation on Iraq and Afghanistan, better relations between the US and Iran will increase world oil supplies, strengthen representative government in Iran, and ease tensions between Iran and Israel. The US has long hoped to access the energy resources of Central Asia by building pipelines from Central Asia, across Afghanistan, and ultimately to Pakistani ports. Neither Afghanistan nor Pakistan will be stable enough in the near future to warrant infrastructural investment. An alternate pipeline route could run from Central Asia to Iranian ports.

Cooperation will help nudge Iran toward representative government. Threats between Washington and Tehran have rallied young, otherwise reform minded Iranians to the mullahs and the nationalism they lay claim to and use to justify electoral restrictions. Relaxed tensions will help rearrange internal priorities away from national security and war, toward growth and reform.

An intuitively compelling criticism of a US-Iran opening is that it will come at the expense of Israel. However, cooperation with Iran implies neither endorsement of mullahs nor betrayal of friends. The US and Israel are obviously closely tied. Iran recognizes this and will see reduced invective toward Israel as a compromise necessary to attain stability in Iraq and Afghanistan, and to benefit from Central Asian energy resources.

* * *

Over the last three decades the US and Iran, though antagonistic and often seemingly on the brink of war, have had many common interests in the region - as they had prior to the 1979 revolution. Furthermore each is now pursuing policies in Iraq and Afghanistan that often complement the other's. Pragmatic factions in each country's foreign policy machinery must see the opportunities for and benefits of further cooperation.

Brian M. Downing is the author of several works of political and military history, including The Military Revolution and Political Change and The Paths of Glory: War and Social Change in America from the Great War to Vietnam. He can be reached at brianmdowning@gmail.com.
 copyright by Brian M. Downing 2008..

Aug 19 2008

Preventing nuclear proliferation...issues for a new President. Part Two of the interview with the Center for Defense Information's Eric Hundman

GPB: Dealing competently with nuclear proliferation will be a key challenge facing the new US President in January. How should the new President engage the international community to effectively support non-proliferation efforts?

Eric Hundman: North Korea, Iran, and Pakistan are all going to be of paramount concern to an incoming U.S. Administration. Of these states, a change of policy towards Iran will rally the greatest international consensus behind U.S. nonproliferation efforts. The Bush administration's refusal to engage Iran directly has delayed negotiations and dealt a seriously damaging blow to international non-proliferation efforts. The next U.S. Administration should talk directly to Iran. We lose nothing by doing so and will learn much about Iranian motivations and concerns. We might even find we share some concerns.

While many conservatives today decry direct negotiations, direct discussions are both practical and productive. Witness, for instance, the direct, recurring, vitally important talks between the Soviet Union and the U.S. at the height of Cold War tensions. Indeed, the Bush administration, after getting nowhere by using the cold shoulder with North Korea, has begun pursuing an engagement approach; it is beginning to pay off. While success has been limited, there has been undeniable progress in opening up Pyongyang's nuclear program, the first step in any disarmament process.

The repercussions of the U.S./India nuclear deal may be subtle, but they will be far-reaching. Under the terms of the deal, the US hopes to lift bans on the sale of nuclear energy technology to India while applying partial International Atomic Energy Agency safeguards to India's nuclear program. This is a significant change, since nuclear supplier states have long demanded full IAEA safeguards - even though India never signed the Nuclear Nonproliferation Treaty (NPT), it was nonetheless defined as a non-nuclear state by default under NPT rules. While an India deal might be seen as rewarding India's mostly exemplary record on proliferation, it is more likely to be a precedent for further exceptions to one of the fundamental bargains of the non-proliferation regime. If India gains an exception from such longstanding rules, Pakistan will certainly demand a similar deal and, without universality to back up the NPT, it may become progressively more difficult to encourage compliance and discourage the spread of nuclear technology.

GPB: Is the "Libya model" of renouncing nuclear programs in return for aid, development contracts and diplomatic engagement a realistic option for countries like North Korea and Iran?

Eric Hundman: Notably, only one state in the world has ever relinquished a home-grown nuclear arsenal: South Africa. However, many would argue that this is the exception that proves the rule - Pretoria's decision to denuclearize was inextricably tied up in its unique political transition to a post-apartheid state.

However, many countries have given up nuclear programs before actually building weapons, including Brazil, Argentina, Canada, Sweden, Switzerland, South Korea, and most recently, Libya. They have done so for varying reasons - alliances with nuclear powers, economic and political incentives, or sudden reductions of regional tension - but renouncing nuclear weapons is far more likely to happen before actual weapons are built.

Consequently, there would be a far better chance of preventing a nuclear-armed Iran than of denuclearizing North Korea. It may be, however, that North Korea is another special case. For one thing, its nuclear test may only have been a partial success. The yield of the bomb seems to have been significantly under the yield for which it was designed. In addition, North Korea's need for energy and food assistance is acute, which may provide the U.S. and its negotiating partners with an unusual amount of leverage. Nevertheless, as long as Pyongyang still feels threatened by the U.S. and others, history does not offer much hope for a North Korea without nuclear weapons.

GPB: What is the likelihood of non-state extremists taking control of nuclear weapons in places such as Pakistan, former Soviet states like Chechnya or Dagestan or offshoots of the Iranians (e.g. Hizbollah, Hamas)?

Eric Hundman: We don't know, but I think the risk is small. Iran may cause worry in a few years, but it is not an immediate threat. With a vast nuclear arsenal, Russia might seem to be an aspiring nuclear terrorist's fondest dream - but Moscow's own problems with terrorism give it a strong incentive to secure its own nuclear weapons/materials. Further, where Russian means of safeguarding weapons have been lacking, the U.S. has often been willing to provide assistance through programs like the cooperative threat reduction effort spearheaded by Senators Lugar and Nunn.

Even so, the U.S. intelligence community still has concerns about theft or diversion of nuclear materials from Russia, especially with insider help. However, between 1993 and 2006 the IAEA only received reports of 18 incidents involving highly enriched uranium or plutonium, and most of those incidents involved very small amounts of material. For all the talk of a black market in nuclear materials, given such facts as this it seems that bomb-ready materials may be much harder to obtain and sell than most people appreciate.

Pakistan is the most worrisome, particularly given the increased instability associated its current change of governments and its high concentration of extremists. Its security measures for nuclear weapons may not be as sophisticated as many other states. However, Pakistan has relatively small amounts of bomb-ready fissile material and has, reportedly, implemented security that is "considered equal to that of most Western nuclear powers" (emphasis mine). And while Islamabad has not given U.S. experts direct access to storage sites for its nuclear arsenal, the U.S. has provided tens of millions of dollars for systems like technologically sophisticated intrusion detectors at nuclear sites.

GPB: Is there a "sleeper issue" of nuclear proliferation?

Eric Hundman: One of the most important - and least discussed - issues is the growing dearth of experts in the field. For the Manhattan Project and during much of the Cold War, research into and management of nuclear weapons and other nuclear technologies were considered prestigious. This is no longer the case. The average age of scientists in U.S. nuclear labs has been rising steadily, and at least part of the rationale for developing new warheads (as the U.S. Reliable Replacement Warhead program intends) is based on the need to attract and retain younger scientists and engineers to work in the nuclear program; if nothing else, such expertise is needed to safely maintain a nuclear arsenal.

This problem even applies, to a lesser extent, to nuclear energy. The U.S. has a particular problem in this arena - a combination of factors led to a virtual freeze on the development/deployment of new nuclear energy technologies in the US, with a corresponding decrease in engineers with relevant expertise. Other countries like France have maintained nuclear energy programs that are proportionally much larger, but there is still a global shortage of experts if there is to be any significant expansion of nuclear power.

Eric Hundman is a science fellow at the Center for Defense Information, where his research focuses on nuclear policy, emerging technology, and international security. He writes a weekly column on these issues, called "Nuke Notes," for Foreign Policy's Passport.

Aug 11 2008

Note to Readers: Following the Pakistani Government's increased crackdown on militants in the Federally Administered Tribal Areas (FATA), the Impact Games/GPB "Cross Border Incursions" game has been closed. To see the results, click here.

Understanding the basics of nuclear proliferation as the world moves toward increasing membership in the nuclear club

GPB: What's the substance of the key agreements that are supposed to limit the spread of nuclear weapons?

Eric Hundman: Dozens of agreements govern the use, transfer, and development of nuclear technologies; they range from binding treaties on the appropriate uses of outer space, to conventions on the management of spent nuclear fuel, to national controls on the export of sensitive technology.

In terms of importance, the cornerstone of the nuclear arms control regime is unquestionably the Nuclear Nonproliferation Treaty (NPT). Signed and ratified by virtually every state on the planet except India, Pakistan, and Israel, the NPT in its most basic sense is a grand bargain: the nuclear weapons states agreed to disseminate peaceful nuclear technology freely and to pursue "effective measures relating to...nuclear disarmament;" non-nuclear weapons states promised, in return, to refrain from developing their own nuclear weapons.

The NPT would not have been nearly as effective without the enforcement responsibility granted to the International Atomic Energy Agency (IAEA). The Statute of the IAEA predates the NPT by over a decade and initially gave primacy to assisting with peaceful nuclear energy development, but the Agency's secondary task was ensuring peaceful facilities were not being used for weapons development. As the NPT came into force and worries about proliferation grew, many came to see inspection and verification as the IAEA's primary role. Today, IAEA inspections form the basis for enforcement of the NPT through the United Nations Security Council or other venues. This relationship is likely to persist: the Statute of the IAEA does not expire and NPT signatories voted to extend the Treaty indefinitely at its 1995 Review Conference.

Two other treaties also merit mention: the first Strategic Arms Reduction Treaty (START I) and the Comprehensive Test Ban Treaty (CTBT). Signed in 1991, START was a breakthrough arms control agreement between the United States and the Soviet Union, and it is still considered a crown jewel of the nonproliferation regime. The two superpowers agreed to large reductions in the size of their nuclear forces, but more importantly, they agreed to a comprehensive system of inspections to verify compliance. These data exchanges have created a reassuring level of confidence that the two largest nuclear arsenals in the world are shrinking in line with national commitments. Unfortunately, START is set to expire in 2009 and, while both the U.S. and Russia seem interested in continuing some level of verification activities, attempts to extend, update or replace START I have so far been non-starters..

Finally, the CTBT, while not yet in force, would ban nuclear testing and encourage disarmament by hindering development of nuclear weapons. Notably, when NPT signatories committed to extending the treaty in 1995, they did so based in large part on the nuclear powers' commitment to negotiate a CTBT.  If the CTBT continues to languish, many believe the NPT bargain may unravel. In addition, the CTBT Preparatory Commission is already deploying an extremely valuable asset: a global monitoring network to detect nuclear explosions. Even if the CTBT never enters into force, this network has already helped detect clandestine tests like North Korea's, and could eventually be useful in nuclear forensics. The CTBT cannot enter force until the 44 states operating nuclear reactors ratify it. Notable holdouts include the United States, China, Pakistan, Israel, India, and Iran..

GPB: What agreements in your opinion are missing from the current set?

Eric Hundman:Development of nuclear energy is not necessarily a bad thing, particularly since safety features should continue to improve with further research. Even further development of nuclear weapons is not necessarily all bad, since in many cases safety and security should improve along with military capabilities.

However, we do need an agreement to address a worsening tension in the NPT: technologies required for peaceful nuclear energy and for weapons are often identical. For example, uranium enrichment plants can be used either to create low-enriched uranium for reactor fuel or high-enriched uranium for warheads; producing warhead material simply takes longer.

Various proposals exist to reduce incentives for states to build enrichment capabilities. Some involve research on fuel cycles that are less prone to proliferation; others involve internationally managed fuel banks that would supply fuel in an emergency; still others involve creating international enrichment centers to allow non-fuel-producing states to participate. Some combination of these measures would be a worthy attempt to strengthen the nonproliferation regime.

GPB: Is there an inherent risk related to increased civilian nuclear development?

Eric Hundman: Nuclear energy has significant advantages over many types of energy production; for one, the plants produce virtually zero greenhouse emissions during operation and even the harshest critics of nuclear power generally don't use safety as their primary argument anymore. Proliferation issues are a considerable worry, though. Enriched reactor fuel can be stolen and processed to make warheads. Nuclear plants can be damaged to cause meltdowns or releases of radiation. And, even nuclear waste often contains plutonium that can be separated out and used for warheads.

However, all these risks can be substantially mitigated; fuel technology can be safeguarded and limited. Power plants can be carefully designed and protected, and waste can be kept in dangerously radioactive forms that are essentially self-protecting. International regulations and agreements limit the danger further. This is not to say mitigating proliferation risks from peaceful nuclear energy is easy, but one notable example is telling: there have been to date no known large-scale thefts of bomb-grade nuclear materials.

The real obstacles to increased development of nuclear power are economic. Once built, nuclear plants provide extremely cheap electricity. However, building costs are prohibitively high (at least $5 billion for a new plant). Licensing requirements can add 3-4 years to already long construction timetables and government policies can change quickly, adding risk to investors. Commodity costs are skyrocketing (uranium fuel may soon be in short supply) and even the skilled labor required to build nuclear plants is scarce. Only one company in the world can make the safest kind of reactor containment vessels. So far, it remains unclear whether a concerted global effort will materialize to overcome the economic, political, and environmental obstacles to further development of nuclear energy.

In the next observation, Eric Hundman will write about nuclear proliferation issues as they pertain to the next American presidential administration.

Eric Hundman is a science fellow at the Center for Defense Information, where his research focuses on nuclear policy, emerging technology, and international security. He writes a weekly column on these issues, called "Nuke Notes" for Foreign Poli..

Aug 3 2008

What do you think about Tibet? Play the new GPB/ImpactGames China/Tibet game...what do you think should happen with Tibet...what do you think will happen? Click here to play.

The Truth Regarding Tibet: From A Chinese Perspective
By Dr. Shi Yinhong, Professor of International Relations, Renmin University of China

The prevailing political opinion on Tibet in the West is so much based on simplistic conceptions, so it is worthy to note some major truths seen by a Chinese scholar who, as many of his colleagues, has listened to the West constantly through the years and now hopes that the West could listen to China on the issue of Tibet.

The first related truth is that Tibet was not a political Shangri-La before the People's Republic of China established its effective sovereign presence in Tibet in 1951. The social and political systems there were medieval in nature: brutal serfdom, authoritarian theocracy, and the unlimited privileges and parasitic rule of a priest class whose huge size was disproportionate when compared with the size of the population as a whole. It was not Shangri-La also in the sense that from Yuan Dynasty in the 13th Century to the early Qing in the 17th, the power and then ultimate legal dominance of China's central government over Tibet had been gradually established, with the legitimacy of theocratic rule of the successive Dalai Lamas regularly re-confirmed and re-granted from early Qing Dynasty to the end of Kuomintang-ruled China in 1949.

The establishment of PRC government's effective sovereign presence resulted from a trade-off between that government and the Tibetan authorities headed by the present Dalai Lama, then in his youth. The central government promised to keep for an indefinite time the social and political status quo in exchange for the Tibetan authorities' acceptance of a "peaceful liberation" of Tibet. However, there had been since then deep tension between that status quo and the increasing demand for social change from grass roots. Mao Zedong, a radical in mind and temper, decided for revolutionary change only a few years after the trade-off. The result was armed rebellion in Tibet, which ended the "status quo" agreement and the earlier form of "transformation." When serfdom and theocratic rule were abolished, the Dalai Lama and his followers fled to India and set up an exile government there. Largely through their half-century of advocacy and propaganda, the West's "romanticism" about Tibet emerged and then went on the rampage. On the other side, there had been two decades of "extra-leftist" policies on religious, cultural, and social affairs in Tibet as in the rest of China, with both the Tibetan majority and Chinese minority people there as victims.

Accompanying Deng Xiaoping's reform, which began at the end of the 1970s, there emerged a re-transformation of Tibet. Religious freedom was restored (or exactly speaking installed for the first time). Tibetan culture was preserved and refreshed with the help of new policies and enormous funds from the national government. Ethnic Tibetans since then have been granted various preferential treatments. The regional economy has been developing rapidly. This development of the Tibetan economy has greatly benefited from the reform of marketization, which brings large numbers of ethnic Chinese into Tibet to create new businesses and jobs. But while marketization has benefited development, it has also resulted both in Tibet and China in some imbalances that have at times aggravated negative effects such as an increase in ethnic tensions.

The truth regarding the present Dalai Lama should also be realized. He is not a "purely religious leader" but a very political person: Tibet's theocratic ruler before 1959 and head of the Tibetan exile government since then. After more than two decades of public advocacy for Tibetan independence, he changed his political posture to recognize China's sovereignty over Tibet. He did this to adapt to a universal recognition within the international community of Chinese sovereignty as well as China's raised status in the world. He also sought to gradually win the sympathy of the Chinese people in the context of China's generally liberal changes in the era of reform since 1978.

Instead of Tibetan sovereign independence, the present Dalai Lama has instead advocated a "high degree of autonomy" as the "middle-road" solution. The essence of his proposal nearly up to now is probably semi-theocratic rule over Tibet, or perhaps over almost all the regions in China that are inhabited by ethnic Tibetans.

The Dalai Lama is a very smart strategist. He is fully aware that his greatest asset lies in the romantic belief held by the West in his identity as a "purely religious leader" and his "transcendent human charisma" together with their fixed expectation and conviction in his moderation and reasonableness. Therefore, almost all his public behavior aims at maintaining, developing, and exploiting this impression. For the same reason, he has a highly developed doctrinal flexibility and strategic patience lacked by most of his exile followers. However, there are substantial limitations upon the effectiveness of this strategy to change the Tibetan status quo. The result is an increasing level of disagreement between the Dalai Lama and his more radical disciples.

Western romantic perceptions about Tibet have resulted in a large part from certain characteristics in the Western way of thinking (i.e., simplistic, absolute, and universalistic approach toward complex and particularistic matters) together with some arrogance in largely refusing to listen to China on the Tibet issue. For example, the Western response toward the mid-March riot in Tibet's capital city of Lhasa and the related humiliation suffered by the Chinese Olympic torch relay in a few Western capitals really hurt most Chinese people. It is like a face turning on the part of West and it is self-defeating if the West truly seeks a friendly and western-styled liberal China.

The stakes are very high for relations between the West and China in dealing cooperatively and reasonably with the Tibet issue. China and the West are increasingly dependent upon each other in several major fields. Mutual good feeling besides common material interests are indispensable conditions for this interdependence. Hence, listening to China is critical as is dealing in a sophisticated manner with the inherently complex issue of Tibet. The West needs to consider the issue with sense of proportion and balance. At least, the West should treat the two disputed parties equally without discrimination, because ultimately a major compromise is bound to be mutual and come from both sides.

Dr. Shi Yinhong is currently Professor of International Relations and Director of the Center for American Studies at Renmin University of China in Beijing. He has published 11 books and more than 400 professional articles and essays on various topics in the International Relations discipline. Dr. Shi received his PhD in International History from Nanjing University. Dr. Shi recently presented China's view at The Aspen Institute's symposium on Tibetan art and culture in Aspen, Colorado. The Dalai Lama attended the symposium and his representatives will present their views in a future GlobalPowerBarometer Observation...

Jul 29 2008

China's Tibet Syndrome: Eventual compromise or unending conflict?

As the Olympic Games approach, China's treatment of its Tibetan, Uyghur, Tujia, Yi, Mongol, Zhuang and other ethnic minorities is, rightly or wrongly, a source of constant global debate. Most visible in recent months is the issue of Tibet, with demonstrations over Tibet (both pro and anti-China) disrupting the Olympic torch relay in numerous countries. Supporters of Tibet and the Dalai Lama have viewed the Olympics as their opportunity to be heard by the world in their quest to make Tibet independent of or an autonomous region within China. Many in China have viewed the these same efforts as an attempt to humiliate the Chinese people and an attempt to ruin China?s crowning achievement in it?s rise to global preeminence.

Conflict has arisen also within the Buddhist religious community as the GPB has reported over several months with a new generation of "angry" monks as some analysts have termed them challenging the Dalai Lama's conciliatory approach with China and suggesting a much harder line on Tibetan independence.

Will the question of Tibet's independence or autonomy be resolved peacefully or drift into an ever escalating conflict?

Recently, The Aspen Institute held in Aspen, Colorado, an unprecedented symposium on Tibetan art and culture, which was attended by His Holiness The Dalai Lama. In the opening panel the difficulty of resolving the Tibet question was immediately apparent as the Professor Shi Yinhong, Director of the Center for American Studies at Beijing?s Renmin University of China, squared off on the future of Tibet with Lodi Gyaltsen Gyari, Special Envoy of His Holiness the Dalai Lama, Orville Schell, Dean of Berkeley?s Graduate School Journalism (and author of nine China books), and Richard C. Blum, founder of the American Himalayan Foundation which has 170 health care, educational, cultural preservation and other projects in the Himalayan region.

Because the session so effectively framed the Tibet debate, the Global Power Barometer (GPB) asked the participants to write Observations summarizing their arguments about the future of Tibet.

In the first Observation, to be posted at 6:00AM GMT on Monday, August 4, Dr. Shi Yinhong will provide the view from China. In subsequent Observations, Lodi Gyaltsen Gyari will present the position of the Dalai Lama and Richard Blum will offer insights from the perspective of those who are deeply concerned about the preservation of the Tibetan culture. This will be a passionate debate...join us Monday to present your comments and views.

The Pakistan/Afghanistan Border ? A Tinderbox...you decide what happens!

No one seems to be getting along at the border between Pakistan and Afghanistan. The Taliban attacks NATO troops over the border but also fellow residents of the Federally Administered Tribal Areas (FATA) inside Pakistan. Someone sent missiles to hit a religious school inside Pakistan in the South Waziristan town of Azam Warsak after informants said buildings near the school were being used by militants. No one has claimed responsibility for the attack, but many, after hearing US drones for several days, are pointing to the United States, which has allegedly carried out a series of strikes recently along the Pakistan-Afghanistan border.

What do you think will happen at the border as tensions heighten?

An innovative agent-based computer modeling company, ImpactGames, has designed a game that will allow Global Power Barometer readers to project what they believe will happen along the Pakistan-Afghanistan border and to project the actions of the principal stakeholders ? Pakistani Islamists, the Pakistani Army, the Pakistani government, President Musharraf, US/NATO forces, Tribal Leaders and the Taliban.

Here's how you play the game. First, click here to access the game site. Next, press the "click to start" button on the main window, which is titled "Cross Border Incursions". Third, click on the question marks to access additional facts, information and timelines. Finally, the "continue" button and it will guide you through the game.

However, to most effectively play, background is needed. The US-NATO-led war in Afghanistan has been faltering for several months now, partly due to the fact that Afghanistan is but one of several battlefields in the region. Not only are the coalition forces (including a poorly-trained Afghan army) having trouble quelling restive Afghan provinces full of Taliban and al-Qaeda insurgents, but insurgents are also active across the border in Pakistan, a zone officially off limits to NATO forces. The US and NATO have pressured Pakistan to shore up security along its frontier but Pakistan for a variety of reasons (not the least of which is that some in the military are sympathetic to the Taliban) has resisted. Attacks on NATO and Afghan forces all along the southern border of Afghanistan are increasing and it is becoming more and more difficult to confront the Taliban, which uses a continually repeating tactic of "attack, vanquish and vanish" to destabilize areas and avoid contact with NATO troops. See the ImpactGames site for much much more background.

So, what will happen? Will the US carry out cross-border incursions from Afghanistan into Pakistan? How will the Pakistani government react? Will it oppose the US or turn a blind eye to US attacks? How will Islamist groups such as the Pakistani Taliban respond to US intervention? Visit ImpactGames and play the game. ..

Jul 22 2008

In a world that's making the most radical political transformation since the Year 0, which candidate is demonstrating an understanding of this new reality?

Either Senator McCain or Senator Obama could become a great President. But greatness and service that protects America will depend on an entirely new approach to foreign policy. So far, Senator Obama is the only one demonstrating the potential.

Let there be no mistake...the writers of the Global Power Barometer hold John McCain in the highest esteem. The founder of Denver Research Group co-founded the Washington DC-based political firm that held leadership roles in Senator McCain's early Congressional campaigns. However, the foreign policy that Senator McCain has described so far is one of a long past period in which two superpowers essentially divided the world and fought a war of words (and smaller proxy wars) until one bankrupted the other through an unprecedented global arms race. It was a relatively simple time when big expensive militaries squared off but couldn't fight directly without inflicting damage unacceptable to either side. That period, which began millennium before last, died in the 1960's with the end of "clean wars" where there were fronts, more or less two sides, troops that confronted each other and winners and losers.

The world militarily and politically has changed more in the last 50 years than in the past two millennia. The advent of global interconnectedness at the most grassroots level has diminished the relevance of political boundaries and has facilitated alliances among similar interests, religions, and ideologies in ways that transcend national interests. This interconnectedness in turn has allowed groups whether peaceful or not to exercise brand new forms of political interaction (including violence) and build their bases outside the influence of national governments.

Among the most important lessons that analysts have discussed in recent years is how groups with little or no military strength can challenge and frustrate superpowers including but not limited to the United States. Since bin Laden convinced the US to loan him the most world's most powerful military to destroy the political balance from the Mediterranean to China, the value of a big military has rested in understanding how to use it...and not use it.

Global analysts have raised several tests that can determine the understanding and judgment of a candidate to succeed in the 21st Century:

• Ideology vs. realism: PostGlobal co-founder Fareed Zakaria in his Monday column said that in terms of historical foreign policy, "Obama seems to be the cool conservative and McCain the exuberant idealist." While a moral compass is important in today's confusing world, idealism (including freedom and democracy) has become sufficiently blurred and "culturalized" that a Western nation actively advocating seemingly clear and good values can cause greater instability, conflict and repression. The Bush Administration in its failure to understand the new world turned what might have been a noble cause in the early part of the last century into a 21st Century disaster that has destabilized a region and empowered an enemy. John McCain risks compounding dangerous mistakes with his commitment to a long term US troop presence in Iraq (which unlike Korea or Japan and Europe after WWII would be a constant cause of instability). More harm is risk in Senator McCain's refusal to do what even the Bush Administration is finally undertaking (setting a withdrawal timeline even if it's called a "Time Horizon") and in his belief that a military holds global answers. Despite pressure from his base Senator Obama has shown a steely pragmatism in providing a timeline or time horizon of 16-18 months...a horizon that it's clear Obama will modify if conditions on the ground warrant. Iraqis clearly approve and Senator McCain now stands alone against a democratically elected government.
  
  
• "Winning and Losing:" The simplicity of winning and losing in foreign affairs likely never was real but 60 or so years ago one side still surrendered and someone could declare victory and an "end" to conflict. Senator McCain sticks to this traditional view of global conflict in a world where, unfortunately, there is no win or lose an longer, just shades of loss. Iraq is a clear example where analysts believe there will be no victory and likely not a complete loss. After US$2 trillion and thousands of lives lost on both sides, analysts can already see an Iraqi future not much different than its past.
  
  
• The structure of war: Since Vietnam, leading with the military has seldom achieved long term political solutions and frequently has resulted in an opposition gaining strength. The US "War on Terror" is a great example. The central "wars" that will challenge the security of the US over the next President's term include competition for: 1) Sources of energy, minerals and food (as if anyone needed to be reminded of this); 2) control of the transport of these resources; 3) economic success; and 4) global political influence. Neither candidate has adequately addressed control of resource transportation or how the US will compete more effectively in the 21st Century economic battles. But Senator McCain loses so far in resource, particularly energy, strategy and in strategies for recovering lost US influence. His energy strategy is essentially more drilling. As long-time Texas oilman, T. Boone Pickens, is saying very publicly these days, "this is one emergency we can't drill our way out of." Senator Obama appears at least to understand this in his focus on alternative ways to power autos and generate electricity...both of which options are quicker and cheaper (and easier on the environment) than expanding drilling. In the race to recover lost global influence for the US, Obama's pragmatism and multilateral approach have already been greeted well overseas while the view of analysts there is that Senator McCain's approach would continue the Bush approach which has failed so spectacularly.
  
  
• Dealing with Islam: The world of Islam, 1.3+ billion strong, is tremendously complex as both McCain and Obama are learning. Rather than understand this, the Bus Administration has been making the same mistakes the US made 30 years ago and the British made in the 19th and 20th centuries. The Asia Times made this point Tuesday: "The United States State Department, meanwhile, has found a dubious use for what it thinks is a moderate strain of political Islam. Washington apparently hopes to steer Turkey into a regional bloc with the short-term aim of calming Iraq, and a longer-term objective of fostering a Sunni alliance against Iran's ambition to foment a Shi'ite revolution in the Middle East." Whether Senator Obama will be forward thinking enough to make new mistakes in relations with Islam is unclear so far. But the strategies laid out to date by Senator McCain for dealing with Islam and areas of the world such as Iraq, Iran and Afghanistan didn't work a century ago (or a year ago), make little sense given the rise of political Islam (where Islamists actually win elections), and are likely to perpetuate the policies that have strengthened not weakened a radical Islamist agenda.
  
  As we said, either candidate can rise to the occasion given the right advisors and an inherent understanding of the new world and 21st Century warfare. But the experienced dog, Senator McCain, needs to learn new tricks and can't let his experience become a liability rather than an asset. That means advisors who understand the geography, strategies and tactics of a radically different millennium and a candidate whose view recognizes the realities of a very new world. ..

Jul 15 2008

The problem's with refinery configuration and the type of crude oil now on global markets...

We've been stumped about why energy prices are so high when many of the analysts we monitor suggest they should be lower. Is it hoarding? Are speculators and commodity markets to blame? One of the smartest energy experts we've come across is Phil Verleger. Phil will become in September the David Mitchell/Encana Professor of Strategy and International Management at the Haskayne School of Business at the University of Calgary. He's served in various government positions, has been a member of the Yale faculty and was a Senior Fellow at the Peter G. Peterson Institute for International Economics. He has written for 25 years weekly and monthly economic analyses of the energy market. Phil is frequently quoted by author and columnist Tom Friedman.

We asked Phil his opinion and he didn't disappoint us with a fascinating take on global oil prices:

"Start from a very simple fact. The price of crude oil in the summer of 2008 should be $70 per barrel, not $140. The rise from $70 to $140 has not been caused by a shortage of crude. Instead it has resulted from bad policies, bad luck, and incredible inattention to market details by certain officials.

The absence of a shortage can be seen clearly from satellite images of the Persian Gulf. There one can view some of the 20 or 30 tankers Iran has chartered to store oil it cannot sell. Even as crude oil surges toward $200 per barrel, Iran cannot move a good portion of its output.

Iran?s dilemma frames the current situation. The country produces a very heavy crude oil with a high sulfur concentration. In today?s modern refineries, these crudes can be processed aggressively to make substantial gasoline volumes. In the best facility, a 42 gallon barrel of heavy sour (containing hydrogen sulfide) crude can be cooked and split to produce as much as 21 gallons of gasoline.

Unfortunately, world consumers do not want gasoline today. Instead, they seek diesel fuel and jet fuel. Most modern refineries are not yet configured to produce jet fuel and diesel fuel from heavy sour crudes. By 2012, this constraint will be remedied. Today, though, refiners must choose other alternatives to satisfy consumer demand.

Demand growth for diesel and jet fuel has been particularly strong in Europe. There, government tax policies have encouraged consumers to buy diesel rather than gasoline-powered vehicles. The logic of the policy was compelling. Diesel-powered cars get better mileage. Thus substitution of diesel for gasoline would cut the continent?s use of oil. This policy today has run up against a supply constraint.

European consumers are also very insensitive to changes in the crude oil price. At retail, they pay around $420 per barrel for diesel. Of course the pumps do not display this number; rather they show 1.7 euros per liter. The very high diesel price requires crude prices to increase by as much as $40 per barrel to get a one percent cut in use, given the very low short-run price elasticities of demand for petroleum products in industrialized economies.

The simplest way to satisfy consumer demand for diesel and jet fuel is to process light sweet crude oils. Such oils are produced in Nigeria in large volumes, in the North Sea, in Libya and Algeria, and in the United States. When processed at technically advanced refineries, these crudes can produce as much as 30 gallons of diesel and jet fuel from a 42 gallon barrel. In contrast, the same facilities can extract perhaps 12 gallons of diesel and jet fuel from a barrel of heavy sour crude.

Total global production of these light sweet crudes totals roughly 12 to 15 million barrels per day out of a worldwide crude production of 81 million barrels per day. Nigeria is the leading producer of light crude with a capacity of 2.6 million barrels per day. However, recent civil strife has reduced output. The recent peak in production was 2.3 million barrels per day in December 2006. This last April, it dropped to 1.766 million barrels per day as rebel attacks disrupted operations.

The loss of Nigerian output is the first and most significant contributor to the spectacular rise in crude prices. The difficulties there may account for a supply cut of as much as 400,000 barrels per day.

The effect of events in Nigeria has been made worse by EU and U.S. environmental policies. Over the last two years, the U.S. EPA and its European counterpart have required refiners to cut sulfur content in diesel fuel to 10 to 15 parts per million from much higher levels. The U.S. rules went into effect in 2006. EU rules are being phased in by the end of this year. Refiners are rushing to meet these standards. One way they do this is to make less diesel. Europe, for example, has become a large importer of the fuel, while the U.S. has become a significant exporter for the first time in years. Traders report that the United States will export perhaps 400,000 barrels per day to Europe in July. A year ago, no diesel exports were going from the U.S. to Europe.

Ironically, U.S. refiners are struggling to meet European demand thanks to renewable fuel legislation passed by Congress. In November 2007, Congress ordered refiners to blend an extra four billion gallons of ethanol into gasoline in 2008. Complying with the mandate forces refiners to produce less gasoline from crude. Since diesel, heating oil, and jet fuel are other products of refining, Congress, in effect, has ordered refiners to make less of these other products.

The European demand for diesel and Congressional ethanol rules have created a dilemma for refiners: how to make jet fuel and diesel fuel containing essentially no sulfur while cutting gasoline production. The solution is to aggressively pursue the shrinking supply of light sweet crude. Thus over the last six months, one can observe an extraordinarily tight link between the price of Brent crude (a sweet crude produced in the North Sea that is a key benchmark) and the spot price of low-sulfur gasoil, an indicator of the spot price of diesel fuel in Europe. The linkage is tight and the econometrics are compelling. The conclusion is clear: European demands for very-low-sulfur diesel are diving crude prices up. Prices will continue to be pulled higher until the diesel constraint is broken by falling demand (induced by recession) or increased supply.

In these circumstances, policymakers have very limited alternatives. First, they can relax environmental standards. There are supplies of higher sulfur diesel that would address Europe?s current needs. Second, governments can release strategic stocks. The U.S. and other IEA members hold significant sweet crude inventories. Release of these crudes (perhaps in a swap) would relieve pressure on prices while preserving environmental restrictions. Third, the U.S. can suspend the renewable fuel mandate. This action would allow refiners to boost runs and produce more diesel fuel. Suspension of the renewable fuel act would also take pressure off food prices.

Regretfully, none of these actions will likely be taken. The failure of policymakers to diagnose the causes of the crude price increase properly makes the adoption of rational policy improbable. Prices will likely continue to rise. A year ago I wrote: '?.looking forward, it appears that triple-digit oil prices may become a regular feature of the global economy within three or four years, and soon the first digit may be something other than a one.'  However, I did not expect incompetent energy policy to bring $200 oil to the fore so quickly."..

Jul 11 2008

The return of Syria: The handshake's the key

This past weekend, top Israeli diplomat and a former director of Israel's foreign ministry Alon Liel, weighed in on the Israeli-Syrian peace process in an article in the British Telegraph (see today's Israel Articles). The Israeli-Syrian peace process is a diplomatic venture that has been taking place over the past several months since March, resumed and brokered by Turkey. Although many have viewed the progress of these semi-covert, low-level, "second-track" negotiations as "2 steps forward - 1 step back", the overall mood has been positive.

The biggest stumbling block to any Israel-Syria agreement is the Golan Heights, a territory held by Israel since 1967, but populated by Arabs, Druze and Circassians, and historically affiliated with Damascus. More than a strategic territory that sits perched high above the surrounding region, the Golan Heights supplies Israel with half of its drinking water. In a dry (and getting drier) Middle East, one doesn't have to guess that the last thing Israel is likely to do voluntarily is strip itself of its own water resources. However, Turkey and even Syria have suggested answers to the water supply issue: Turkey has offered to divert streams from the headwaters of the Tigris and Euphrates into Syria, and Syria has offered to build desalinization plants so that Israel could continue to use water from the Golan Heights.

Despite the obstacle of the Golan Heights, Mr. Leil suggests that Syria very well could (and may need to) forge a peace with Israel. Leil suggests that Syria might even be willing to break ties with Iran if the United States were to make a better offer by providing Damascus with military and financial backing. Syria has been in a state of partially self-inflicted and partially sanctioned isolation during the past few decades, arguably since the breakup of the United Arab Republic (UAR) in the 1970's. Syria's support for Iranian-backed Hezbollah and Hamas, both extreme religious groups that in fact theoretically clash with the Ba?athist leadership in Damascus may have once been necessary but now are more a liability. The muted Arab (and Syrian) response to the bombing of Syria's mysterious, North Korean developed nuclear installation by Israeli jets in 2007 is further evidence of Syria's pariah-like status.

But is Syria really looking to break away from Iran, the region's growing superpower? Is peace with Israel and money from the United States worth the alienation of your closest ally? Does President Assad indeed wish to let go of his ties to Iran precisely because he fears Iranian influence? Or does he know something we don't know and is he trying to jump ship before it is too late?

If Syria is indeed considering a shift in its allegiance, then time and actions can only tell what will happen. Despite the fact that Israeli Prime Minister Ehud Olmert would like the US to mediate talks, most analysts agree that little progress will be made between Israel and Syria until after a new American President takes the reigns of power in Washington.

Many of the rumors surrounding an Israeli-Syrian reconciliation may be dispelled this weekend when the Conference of Mediterranean Nations meets in France. Center-right President Nicolas Sarkozy has made it a priority to restore normalcy to relations with Syria. Indeed, Syrian President Bashir al-Assad has asked France "to play an important role" in ongoing Middle East peace negotiations including the Syria/Israel talks now being mediated by Turkey (this request has not pleased Turkey).

This weekend, President al-Assad and his foreign minister Walid Ali Muallim will sit at the same table as Israeli Prime Minister Ehud Olmert and his Foreign Minister Tzipi Livni. Some suggest that Olmert and Assad could actually shake hands, an act that would be seen particularly in the Middle East as a goodwill gesture of historical proportions. Yet others say that Assad is not at all willing to agree to or even acknowledge any Israeli overtures at this point and others suggest that rivalries between Turkey and France over who gets credit could stop such a gesture. Still others say that Syria is looking to get at US aid and protection so handshakes, hugs or kisses may become Syria's bargaining chit for an early victory by the new Administration.

Whether or not there's a handshake in France, the undercurrents of this weekend's summit will be fascinating. Whether anything suggesting detente occurs will tell volumes about the next year in the Middle East - and could well represent an opportunity for a President McCain or President Obama that hasn't been seen in many Administrations.

UPDATE: Monday, July 14, 2008; 1:00AM GMT

Now that the Mediterranean Union summit in Paris has passed, analysts are making more speculation about the progress of future Syria-Israel talks and the possibility of normalization of Syrian relationships with the West.  President Assad appeared confident at the summit, and many publications noted that this was his "return to the world order" after "years of isolation".  His boldest statements, delivered to French television, included that Syria is vital to any peace talks in the Middle East, and that no Israel-Syria peace can be made with the current American Administration in Washington.  Not only is Assad insisting that Syria be involved more in Middle Eastern regional politics, he is echoing the voices of several leaders and playing to the sentiments of many people around the world in his outright rejection of the Bush Administration.

The possible and awaited handshake (of symbolic importance) between Assad and PM Olmert never took place, but Turkey, keeping a stride ahead of France's Sarkozy, remained key as an arbiter between the two leaders, remaining the middle man in note-passing that took place during the summit.  One can only expect these ?second track? talks to continue between the two nations until after a new American president is inaugurated in January.

So does this symbolize a willingness from Syria to snuggle up to the West?  Clearly, Assad will only do this on his own terms, and with governments he approves of.  Assad is playing a smart game, dangling the carrot of relinquishing his county's alliance with Iran, and attempting to lead the West into a position in which it is forced to shower Syria with military and economic aid, more blindness to its interventions in Lebanon, and, of most symbolic importance, repossession of the Golan Heights from Israel.

Jul 9 2008

Challenges awaiting a new US President in a confusing new world

In many ways, the world is becoming a better place. PostGlobal founding partner, Fareed Zakaria, reports in his new book, "The Post-American World", that the global economy has advanced dramatically and peace is alive and well. One hundred twenty four nations had better than 4% growth in 2006 and 2007. Zakaria reports that the share of people living on a dollar a day or less fell from 40% in 1981 to 18% in 2004 and is expected to fall further to 12% by 2015. Poverty according to Zakaria is falling in countries that are are home to 80% of the world's population. Zakaria quotes Harvard professor Steven Pinker as arguing "that today we are probably living in the most peaceful time in our species' existence."

It's true that despite the bungling of the Bush Administration, the world has become a better place over the last 20 years as Zakaria says due not to the decline of the US but "the rise of the rest [of the world's nations]."

Yet, Zakaria may be guilty of an "audacity of hope" because the continuation of this progress is by no means guaranteed in a world of $125+ oil barrels, increasing competition for minerals and other commodities critical to fueling growth, the empowerment in a connected world of grassroots groups like al Qaeda (who have proven capable of manipulating governments like the US), and the transformation of many governments into business entities backed by a growing global militarization.

Look at some of the problems that likely will threaten the global march to peace and prosperity:

• A failing US economy - The GPB has reported for nearly two years that few recognize the deep and fundamental weaknesses of the US economy. Over-building, speculation, complex "black box" financial contracts that not even Wall Street can value, demographics that clearly suggest there's no one coming up the 20-54 year-old ladder to buy the houses built by the baby boomers, mortgage scandals and other issues portend an additional price fall of 15-20% or more in an already devastated home construction market. Financial crises (there are more than one) have wiped out more than $1.3 trillion in the equity of the S&P's financial components just since last October. The loss of capital among US financial institutions (perhaps more than two thirds gone) have squeezed credit dramatically with the potential for a market killing credit crisis. The US Fed Chairman Bernanke and Treasury Secretary Paulson now admit that US economic fundamentals really aren't "strong" as has been claimed by the Administration for the past year. The new President will have not only have to deal with further housing declines, but also high job losses and commodity driven inflation immune to interest rate tools at the Fed's disposal. The GPB has said for 18 months a US DOW Index of between 8,000 and 9,000 is not at all unlikely. A growing number of analysts suggest a meltdown may actually occur in the waning days of the Bush Administration.
  
  
• The quagmire of Iraq, Afghanistan, Pakistan, and Iran - Analysts believe all these are interrelated and due in main to US foreign policy strategies that are described at best as directionless and incompetent. Al Qaeda, perhaps learning from Ronald Reagan, has found that draining a nation of influence and treasure is as sure a way to win as a military victory. The Taliban, learning from George W. Bush, are surging rings around NATO in Southern Afghanistan...causing record deaths of civilians and coalition troops, destabilizing the government of President Karzai and, interestingly (perhaps with the help of Pakistani intelligence) are drawing India into the Afghanistan swamp. Iran, its regional influence dramatically enhanced as the result of both the Iraq and Afghanistan adventures, now has the power both to develop nuclear weapons and as we saw with yesterday's missile tests to send oil to $300/barrel in the event of a conflict.
  
  
• The energy wars of Eurasia - Both the production and transport of oil and, more importantly, natural gas have emerged as the "quiet war" that impacts global energy prices and the security of regions or countries from Europe to India. Pipelines such as the Turkmenistan/Afghanistan/Pakistan/India (TAPI) Pipeline, the Baku/Tblisi/Ceyhan (BTC) Pipeline and the Iran/Pakistan/India (IPI) Pipeline have themselves become battlegrounds that can influence the ultimate outcome of Afghanistan and the outcomes of long standing rivalries such as those between the US and Iran, India and Pakistan and Iran and Afghanistan. In the next few months, the Bush Administration will attempt to give no-bid contracts to US oil companies to develop rich Iraqi oil fields, giving those companies dramatically more of the field pie than occurs in deals across other regions. Given the US sacrifice in Iraq this may be viewed as the spoils of war. However, the next President will have to deal with whether to maintain a "100-year" occupation to support these contracts and to deal with the tensions a continuing conflict breeds, particularly in the Middle East.
  
  
• The resurgent cold war(s) and global militarization - Natural resource competition, the increasing military budgets of countries that can afford militarization (like China) or re-militarilzation (like Russia), and simply the risks associated with "daggers drawn" particularly in a world of increasing technological capabilities will challenge the next US President as never before. Russia has now threatened military action if the US/Czech Republic missile defense shield is ratified. China, which has executed a strategy of placing large numbers of Chinese citizens in nations with which it has natural resource interests, despite its current hands-off policy may decide to use its growing military to protect both its citizens and its new found assets.
  
  
• The political transition and perhaps destabilization of China - Daniel Rosen, the international expert on the economic development of Asia and particularly China, said last week at The Aspen Institute's Ideas Fest in Aspen, Colorado that as China has moved from a per capita income of about $200 to $2,000 the benefits of economic growth have calmed the country. However, historical precedent according to Rosen suggests that as a country moves from $2,000 per capita income to $10,000, economic growth has a destabilizing effect as a newly enriched and empowered populace begins to demand political power to go with its economic power. China had more than 80,000 large scale protests over the last 12 months. The next decade as China works its way the economic challenges that come with dramatic growth may see China destabilize...an extraordinary challenge for a new President.

Jun 27 2008

The reality of pre-election terror strikes...bin Laden's fascination with US Presidential campaigns

Top McCain strategist Charlie Black's comment to Fortune magazine that a terrorist attack on US soil "certainly would be a big advantage" roiled the US presidential campaign this week with the Obama campaign saying it encouraged a terror attack and conservative talk show hosts saying Obama was an "appeaser" and that McCain would be best to protect America against terrorists.

Black's comment was dumb and pretty typical of the style of "win at any cost...who cares about the good of the country" politics that Black and colleagues practice.

However, the real story is that bin Laden understands US politics and has played the US masterfully over his career. Over nearly 15 years he worked ultimately successfully to goad the US into stirring the Middle East pot and create conditions where al Qaeda could prosper or perhaps even gain control of a nation.

To this day, John Kerry (D-Mass.) has rightfully blamed an Osama bin Laden videotape released on Oct. 29, 2004 for his election defeat. John McCain at the time made a Charlie Black type of comment relative to that videotape, ?I think it's very helpful to President Bush...It focuses America's attention on the war on terrorism. I'm not sure if it was intentional or not, but I think it does have an effect.??

This time around, McCain distanced himself saying "If he said that -- and I don't know the context -- I strenuously disagree."

Obama may or may not "appease" terrorists but "appeasement" is precisely what bin Laden does not want since his strategy has been for more than a decade in multiple countries to create the kind of chaos in which his movement thrives. The favored candidate for bin Laden and a good terror recruiting environment is one who favors a long-term occupation and a clear Western enemy within line of sight of his followers. The candidate who will provide that is obviously John McCain.

The systems underlying the GPB currently are forecasting the highest probability of an attack on US soil that they have since late 2004/early 2005. But the index is not in the critical range for two primary reasons. First, the effect on US elections of a strike on US soil is very much uncertain. Analysts are mixed on whether such a strike would help or hurt McCain. It may focus public attention on national security but it will also trounce the Republican argument that they've made the US safer. Bringing terror back to the front burner in US politics is a risky strategy.

Second, the resources and planning required for a strike on US soil may be better spent focusing on Pakistan and Afghanistan...both in the neighborhood, both unstable, and both good al Qaeda targets. President Bush ironically has in many ways been successful in keeping terrorists from striking on US soil not by weakening terror networks but by creating a target rich environment in the Middle East and Asia.

These reasons aside, some analysts do believe that a very big terror strike on US soil (e.g., a WMD strike) could well result in the Cheney camp within the Administration being successful in causing a US super-strike (ideal target...Iran). This would as nearly all analysts suggest ignite the Middle East...providing the regional chaos bin Laden so desires and the continued drain on US influence, treasure and lives that bin Laden has sought.

At the very least, bin Laden won't be able to resist weighing in at US election time if for no other reason than ego. Expect at least a well timed tape. It is also very possible, as some analysts have suggested, that he will strike US interests abroad or perhaps even Canada to raise national security as an issue without the risk, uncertainty or difficulty of a US attack. Raising the violence level in Iraq or Afghanistan is a third possibility that some believe would provide strategic advantages beyond the US election.

What is certain, however, is that Osama bin Laden is thinking about what will turn the US elections to his advantage...what will help keep those who have been so helpful to his goals in power and the US the continuing fuel for Middle East fighting. Let's hope he doesn't decide that a strike on US soil is the way to accomplish that...

Jun 13 2008

Bush's Iran: Growing influence and power...

Right now, three questions dominate global discussion about Iran:

• How did Iran become the regional powerhouse it currently is?
• Will Iran succeed in undermining or at least altering the long-term US security pact with Iraq?
• Will there be a pre-emptive attack on Iran by the US or Israel before the end of the Bush Administration?

Jun 9 2008

How the first connected, globalized generation views the world and the US role in it...

What international issues are of greatest importance to young voters?

Our generation is much more concerned about issues of foreign policy than people give us credit for. Young people are on the frontlines fighting the war in Iraq and at the same time they are on the frontlines of the anti-war movement. The youth of the world have rallied and led the charge around helping the situations in Darfur and Myanmar. Young voters are passionate about global climate change. We see injustices and immorality around the world we want to right them and do whatever we can to help. This greater awareness is certainly helped by the fact that young people can access world news much more easily than in the past. Increased globalization means we have friends who live all over the world, and we also are able to spend more time outside the United States than generations past.

Have young voters developed a greater global awareness than previous generations?

I think so. But most of that has to do with the way the world works now as opposed to how it worked when our parents or grandparents were young. We live in a world where in many ways we can't avoid global consciousness. A globalized world is a reality of our daily life. This is in large part due to the rise of technology and in particularly new media. We are sharing ideas, videos, media and technological experiences daily with people all over the world. Also, as a generation, I believe we are more tolerant of differences that have traditionally divided people (gender, race, ethnicity, religion, sexual orientation, disability to name a few). This extends to our world view, where we can understand and embrace other cultures, much more naturally than prior generations. A global, cross-cultural view is hardly something to think twice about in the millennial generation.

What do young voters consider the most desirable leadership qualities for the next president?

Young people are looking for a president who can lead everyone. They want someone who is going to understand challenges at home and abroad, and they want someone who is going to work at a bipartisan level and take action on their slew of campaign promises. A lot of voters have been frustrated that, after the 2006 congressional elections, which many saw as a vote to end the War in Iraq, Congress didn?t end the war. Young voters as well as many older voters are frustrated with a political process that says one thing and does another. We want the next president not only to announce intentions to lead major fights, but for them to lead and win.

The next president will have an unbelievably full plate with many major issues on the agenda - from health care to the war in Iraq, from global warming to Iran and from the economy to nuclear proliferation. Young voters want issues to be resolved by the next president with bold but bipartisan efforts. And, as if that weren't enough, the desire for authenticity is also overwhelming. We are saying loud and clear that we want a leader who is going to listen to and engage people across the political spectrum as equal members of our society. Our next president will need to be truthful and inspiring, and help improve America's image in the world.

Your organization deals with a young generation who has only known a world where the US is the sole superpower. However, multi-polarity is the new world order of the day.  Many wonder, with the rise of China and India, the reemergence of Russia and the positioning of non-aligned states, whether the US will be able to maintain its past level of influence.  How do the youth of America and the world perceive the current state of global affairs and the role of the US.?

Today, young people are incredibly conscious of the fact we live in an age of growing globalization and that we live in a country whose influence and stature in the world has diminished. We as a generation do not accept that America is the be all and end all. We want America to be a leader, but we want it to lead by inspiration and example - by doing the right thing, not by forcing its views on others. A lot of young people think it is great that people in other countries are getting to have the kind of opportunities that previously only those in the advanced countries experienced. We are not afraid of a world where wealth is spreading, and justice, equality, and democracy are reaching new levels around the world.

At the same time, we are not naive. Young people are watching the rise of other countries, and we directly feel global competition when we apply for jobs and even when we apply to college. We are now competing for high quality opportunities with young people all over the world and I think it's taken some time for us to get this. It's a new phenomenon. But I also think there is more of a sense among young people that they can find alternatives and that Americans can create new opportunities. Young Americans love their country, but there is much less of an "America first" or "America only" view of the world than might have been characteristic among past generations of Americans.

David D. Burstein, 19, is the Founder and Executive Director of 18 in '08 and the producer of an acclaimed documentary by the same name. 18 in '08 is the nation?s largest youth-run young voter engagement organization. David, a student at Haverford College in Pennsylvania, currently serves on the advisory boards of The Westport Youth Film Festival and Presidential Classroom. You can learn more about "18 in '08" at www.18in08.com...

May 29 2008

An Update on the US Missile Shield Plans for Eastern Europe; The story that won't go away.

For over 8 years now, controversy has brewed between Washington and Moscow over the Bush Administration's proposed missile plan in Eastern Europe. The US government claims that missile defense installations are necessary in Poland and the Czech Republic in order to deter against potential nuclear weapon-yielding threats from "rogue nations" like Iran or North Korea. Meanwhile, Russia has pointed out, quite reasonably in the opinion of many, that shields in Eastern Europe do little to deter against Iran (they ask: wouldn't a well placed shield closer to Iran be more effective?). The Kremlin suggests that installations in Poland and Czech Republic can be geographically poised only against Russia, standing in the former Soviet sphere of influence.

Many analysts echo Moscow's concerns, pointing out that while the US is certainly looking to bolster its already strong global missile shields, installations in Eastern Europe are hardly the place to build them if you want to defend against Iran.

This missile defense shield controversy has been the most obvious manifestation of what many pundits and politicians have feared for several years (perhaps since the inauguration of Vladimir Putin in 2000) - a new Cold War. This cold war, like the last would also draw in Europe. The Litvenenko spy incident soured Russian relations with London. Europe and Russia have been battling for years over natural gas prices and the stranglehold Russia has on Europe's energy supplies.

But the main fireworks have still been between Russia and the US. Former Russian President (and current Prime Minister) Putin stated in February 2007 that the United States has made the world more dangerous than at any time during the Cold War. Russian Foreign Minister Sergei Lavrov later wrote an editorial in the Washington Post referring to Putin's statement, and echoing US Secretary of Defense Robert Gates' claim that "One Cold War was enough". US President Bush warned in October 2007 See today's US Key Articles that Russia risks sparking "World War III" if it continues to play a supportive role to Iran.

Moscow has attempted to call Washington's bluff, most notably last summer, suggesting an alternative to the missile shield plan. Russia proposed that the US share access to the Qabala radar station in Azerbaijan, which neighbors Iran and has been, for the most part, a US ally. The Bush Administration rejected the offer, claiming that the Qabala site was not as good as Eastern European sites.

Although without a breakthrought, there was some good news following positive meetings concerning some agreements on the missile defense plan. The most important was a March session in Moscow attended by Putin, US Secretary of State Condoleezza Rice and Secretary Gates.

But this week has seen a renewal in tensions. Russian Lt. General Yevgeny Buzhinsky on Tuesday restated his country's concern over the planned 10 interceptor missiles in Poland and the associated radar station in the Czech Republic, stating that "these plans have an explicitly anti-Russian potential," and "we are in the process of considering asymmetric measures, there are some already, but I am unable to say right away what they would be like." See today's Russia Key Articles. And Russia has drawn China to its defense. Russian President Dimtry Medvedev last weekend visit Beijing to issue a joint statement with the Chinese government against the missile shield program on the grounds that it disrupts international stability and nuclear nonproliferation efforts.

The Russians are, of course, biding their time to see what a new US President will do.

Republican Presidential candidate John McCain has expressed strong support for missile defense in nations "like Czechoslovakia" See today's US Key Articles, and has even stated that China and Russia are potential "strategic competitors" See today's US Key Articles.

Candidate Barack Obama is harder to read on the issue of missile defense. As the Washington Post's William Arkin has pointed out, Obama has made few statements about the issue except that he supports a system for Israel. When it comes to Russia, Obama states on his campaign website that he would work with Russia on non-proliferation, and work to "set a goal to expand the U.S.-Russian ban on intermediate-range missiles."

Candidate Hillary Clinton has been even more opaque on the issue of missile defense. Her voting record has been consistently against missile defense bills, and her website says nothing about the proposed missile shields in Eastern Europe. In an article she wrote in Foreign Affairs last year, she states that the Bush Administration has pursued an "expensive and unproven missile defense technology".

Even with McCain's specific endorsement of the eastern European missile shield, it remains to be seen if the administrations of any of these three candidates would follow the same hard-line and bellicose rhetoric and policies as the Bush Administration.

It also remains to be seen whether the people of Poland and the Czech Republic will continue to support their government's endorsement of US missile defense plans...plans that place these nations squarely on the front line between Russia and Western Europe. Repeated protests and grown public concern may be factors in the next rounds of negotiations.

That being said, the very underreported live-firing exercises by the Russian missile cruiser Varyag in the Pacific Ocean this week (See today's Russia Key Articles) play very well into the Bush Administration?s wary view of Moscow and continuous calls for an indestructible military-industrial defense apparatus. As Russia resuscitates its military machine, one cannot help but wonder if the Bush Administration's concerns about its missile defense programs will garner greater justification. The important question, of course, is whether Bush's strategy has aptly discerned an increased threat or in fact created it...

May 23 2008

The facts about Iraqi oil

As gas prices continue to rise throughout the world, many analysts are asking who is benefiting. Many eyes, of course, turn to the Persian Gulf, which produces at least 25% of the world's oil. No country's oil is more controversial than Iraq's. The GPB asked Ben Lando, Energy Editor for United Press International and Editor of the The Iraq Oil Report to give us the facts about Iraqi Oil.

GPB: A lot of statistics are loosely thrown around regarding Iraqi oil. To your knowledge, how much Iraqi oil exists? Where is it drilled? How and where is it shipped? Who is currently profiting from it? To what degree is the Iraqi government dependent on Iraqi oil revenues?

Ben Lando: Yes, too often politicians and pundits are quick for sound bites saying that this or that should be done with Iraq oil and its revenue, and it's unfortunate for the Iraqi people, for decision makers and policy makers. It's generally accepted that Iraq's proven reserves are around 115 billion barrels, the third largest in the world behind Saudi Arabia and Iran. What's actually recoverable is another question, largely but not only because of the overworking of the oil fields by the current government and in the past by Saddam Hussein's regime in order to increase exports and production levels, thus threatening the overall life of the oil fields. On the other hand, Iraq is mostly under- and unexplored, with an unknown but likely large quantity remaining to be found. Oil fields are scattered across the country but mostly in the south and north. About 80 percent of the reserves are in the south and 90 percent of the exports are sent to market from the export terminals in the Persian Gulf and then purchased by a couple dozen international companies via tanker. Nearly all of the rest of the exports head to the Turkish port of Ceyhan from two pipelines that begin at the Kirkuk field in the north. This pipeline is starting to remain open consistently and the Iraqi Oil Ministry said it averaged nearly 450,000 barrels per day in April -- only a third of capacity -- but from 2003 until mid last year it was attacked so often it was offline more than it was on. About 500,000 barrels per day are refined for domestic consumption in Iraq, and about 1.9 million exported. As the price of oil increases so do profits, and through last month Iraq earned already this year half of its total 2007 oil income of $41 billion. Predicting what this year's total oil sales will be is used often and remains unhelpful, considering the price of oil is on a roller coaster and exports from Iraq could be a victim of the war zone again. Iraq is an oil economy and without it the state would collapse. All revenue is collected at the Development Fund for Iraq, kept in an account at the Federal Reserve Bank of New York, per a U.N. mandate to ensure transparency and protect from Saddam creditors claiming the "new" Iraq's funds.

GPB: The Iraq Oil Law has received increased attention in the press recently. What is the purpose of this law and who are the key players in its creation? To what degree does the US government and/or military play a role in its legislation and implementation? Is the US government seeking to pay for the Iraq War with Iraqi oil revenues? What impact will oil revenues concretely have on the redevelopment of Iraq? And what of the Kurd independent development contracts?

Ben Lando: The Iraq Oil Law is far from being approved and is a lightning rod in Iraqi politics. Its goal is to create a governing structure for developing the oil and gas reserves, but there is widespread disagreement on four key issues:

• to privatize or denationalize and if so to what extent;
• whether the oil strategy is controlled by the central government or the local governments and to what extent;
• whether a country enduring war and occupation should sign long term deals; and
• to what extent and pace to rebuild the state-run industry.

May 21 2008

What makes a great President; analysis by David Gergen and Doris Kearns Goodwin...what do you think?

On Monday, May 19, The Aspen Institute and Roosevelt House, which is the Public Policy Institute at Hunter College, held a forum called "What Makes A Successful President?". Brian Williams, the Anchor of NBC Nightly News, moderated a discussion with David Gergen, former Presidential advisor and Professor of Public Service at Harvard's Kennedy School of Government and Doris Kearns Goodwin, noted author and Presidential historian. The Global Power Barometer took special notice of the session since over the next 6 months, we'll be tracking in a number of Observations how the world believes a new US President will need to act, both strategically and personally, to re-establish global stability.

The participants in the Aspen Institute/Roosevelt House panel believe America is at a crossroads...what they termed a "Strategic Inflection Point for America." Among the multitude of challenges they felt a new President would need to address were these critical priorities:

• Putting America's domestic house in order by rebuilding America's economic health, creating sustainable policies to improve America's health care and education systems, and narrowing the growing economic gap between rich and the poor so that America's vibrant middle class enjoys once again the fruits of economic expansion;
• Strengthening democracy here in America;
• Confronting nuclear proliferation in an increasingly chaotic and multi-polar world;
• Creating global consensus on a fair climate change strategy before it's too late; and,
• Regaining and maintaining America's influence while ensuring a peaceful transition from hegemony to multi-polarity, particularly given the rise of China and India

May 15 2008

If we let history (which we certainly aren't learning from) and the evolution of 21st Century global politics be our guide, victory in Iraq will come from leaving Iraq...

"A decision to back out of the war is going to require...resolve backed by a combination of arguments that withdrawal won't be a victory for al-Qaeda or Iran, that it isn't prompted by fear, that it doesn't represent defeat, that it's going to make us stronger, that it's going to win the applause of the world, that the people left behind have been helped, and that whatever mess remains is somebody else's fault and responsibility.

Missing from this list is victory - the one thing that could make withdrawal automatic and easy." Thomas Powers writing in this month's New York Review of Books.

In a very powerful piece (see today's "US Articles"), Mr. Powers reviews ten books about Iraq and Afghanistan and concludes that no matter who is elected President, events and American pride will lead the US to follow a thousand years of disastrous Middle East adventures by nations ranging from Britain to Russia. Like its predecessors, the US will ultimately leave and lose...the question is only how much US treasure and how many US lives will be squandered.

Yet, Mr. Powers, as well as presumably the authors he reviews, misses a critical point - that leaving Iraq and even Afghanistan is not defeat. Moreover, learning from those who attacked up on September 11 can allow the US to turn it to victory.

Beyond the obvious - that learning from history is victory in itself - American politicians have not yet understood what the more progressive thinkers in the military are beginning to figure out, which is that military power is the US' greatest line of defense, but in a connected 21st Century can also be turned against America.

As we've said in the GPB since it began, astute global strategists (of which Osama bin Laden is clearly one) figured out long ago that the military might of superpowers can essentially be borrowed to achieve regional goals. When bin Laden began ratcheting up his attacks on the US 15 years ago, his goal was not, as many politicians suggested, to "punish" the US for its infidel ways. Making that assumption is both to believe bin Laden is a quixotic idiot and to dramatically underestimate the strategic ability of US opponents. Rather, as the GPB has pointed out many times, bin Laden realized he couldn't afford the US military, so he sought to "borrow" it. His goal was to goad the US into creating the Middle East chaos under which Islamist movements could both thrive and gain political power.

And, he achieved his goal to an extent he likely never dreamed possible.

But we cannot change the past. The US is in Iraq and Afghanistan. But is the path to "victory" as John McCain suggests to continue to do the bidding of US opponents? Is it to continue to keep the Middle East in chaos...a chaos that has benefitted radical Islam and Iran...a chaos that has allowed China and Russia to gain the edge in striking deals to develop Iraq's oil and gas assets (yes, believe it or not, the US is losing even in the business of producing Iraq's oil).

As Washington Post columnist and PostGlobal founder, David Ignatius said in his Thursday (May 15) column, "Odd as it sounds, I fear that the Bush administration is making the same mistake as hard-liners in the region. It doesn't know when to compromise. It accumulates lots of chips through its military power, but it never plays them at the bargaining table."  Mr. Ignatius states that in both 2003 and 2006, the Iranians made serious attempts to discuss the stabilization of Iraq but was rebuffed by the Administration.  When Syria asked for help in negotiating a peace deal with Israel, the US also refused.

Mr. Powers points out rightly that while the US Democrats promise that planning for Iraq withdrawal will "begin on Day One...the plans will be hostage to events." That's an understatement. There is little disagreement among analysts that the continuing US presence both empowers US opponents and has been the recruiting gift for radical Islam that keeps on giving. And, as the cost of Iraq exceeds $3 trillion, there's a growing question as to whether this continual bleeding of US treasure will not begin to permanently weaken the US.

Nearly all global analysts believe that Iraq will go through a period of increased violence, perhaps even a breakup whenever the US leaves regardless of how long it stays. Mr. Powers goes so far as to suggest that "The surge, therefore, has not so much ended the sectarian strife as it has set the stage for a renewal of civil war at a higher level of violence."

Nearly all global analysts also concur with the view of the authors Mr. Powers reviews that Afghans will go on fighting among themselves long after the US leaves.

So, one might ask the obvious questions. If the US is helping its opponents by staying in Iraq and even Afghanistan, would it not be victory to deny this valuable asset by the simple act of leaving? If the US is weakening itself far more by staying in Iraq and Afghanistan than a thousand al Qaeda terror attacks would ever weaken the US, would it not be victory to leave?

Mr. Powers concludes his piece by predicting that "four years from now the presidential candidates will be arguing about two wars in Iraq and Afghanistan, one going into its ninth year, the other into its eleventh." And they will arguing with the US in a far weaker position nationally and internationally than it is now. Richard Nixon ultimately declared victory and came home from Vietnam...it was messy and perhaps humiliating. But when the US finally got out of the way, Southeast Asia, after a period of violence, settled and ultimately prospered. To us that sounds a lot more like "victory" than the alternative. ..

May 8 2008

Could Putin's legacy be a war with Georgia?

As Dmitry Medvedev is sworn in as Russia's next president, Russian "peacekeepers" are flocking to Abkhazia. Georgia too has reported significant troop movement along the border of this breakaway province. This latest build-up on both sides has prompted analysts to speculate that the outbreak of war could be at hand. Even the chief of the Russian peacekeeping force General Sergei Chaban said Sunday, "At this moment we assess the situation in the conflict zone as a complicated and tense one...All this alarms us, because if this situation is not changed one cannot exclude that the two sides can use force against one another." (Source: Reuters).

Tension has been building between Russia and Georgia since the breakup of the Soviet Union, but over the past year it's grown to crisis levels. After what seemed like serial episodes of incidents of downed spy planes and drones over Abkhazia (with both sides giving varying accounts of what has happened), a series of events riled both parties into taking the conflict to a higher level. When Kosovo declared its independence, a jilted Russia almost immediately established formal ties with Abkhazia, distributing Russian passports to some Abkhazians. Adding injury to insult for Georgia, Russia was next successful in blocking the Georgian accession bid to NATO. Georgia then registered a formal complaint with the UN Security Council that Russia was supporting the independence claims of both Abkhazia and South Ossetia. NATO then made very strong statements in support of Georgia's territorial integrity. Since then, rhetoric between the two sides has reached fever pitch (one does have to wonder whether a country smaller than South Carolina could be sane in confronting the Russian military).

Analysts are quick to note that it is not a surprise that tensions have reached their apex now. Following the rebuff by NATO, Georgian President Mikhail Saakashvili is seeking to build nationalistic momentum ahead of parliamentary elections this month: a little saber rattling he figures will do no harm. Of course, after credit agencies worldwide downgraded Georgia's credit worthiness, citing tensions with Russia as the cause, Georgia's Prime Minister Lado Gurgenidze "clarified" his President, saying that Georgia's main interest is economic development and peace, not war with its rather bigger, slightly more powerful nuclear armed neighbor.

This is probably not a great time for the very small mouse Georgia to tempt the very big lion Russia. Hardliners in Moscow may be testing the resolve and strength of the new President Medvedev, despite his backing of Vladimir Putin. There are constant rumors that Kremlin infighting is rampant and that Medvedev's hold on power is tenuous until he can assert his authority over corrupt and crony-laden baronies. More worrisome is the possibility that hawkish generals may stoke conflict to test the limits of Medvedev's authority over the Russian military.

One could argue that the very unlikely Russia/Georgia conflict represents just saber rattling that suits both sides presently, but then again violence and war are very real possibilities (remember that Ronald Reagan invaded Grenada...the Caribbean equivalent of Georgia), particularly given this conflict could be a strange proxy war with the West. Both Georgia and the Ukraine represent the front line of a new kind of war - one for influence and power...with Russia's goal to ding the West at every chance (at least until the end of the Bush Administration). Every possible issue, whether it is related to trade (Russia is actively seeking membership into the WTO), energy development and pipeline transport, missile defense, or border sovereignty is in play, and is subject to posturing, threats, tit-for-tat negotiating, barter, diplomatic wrangling, underhanded maneuvering and possibly violent conflict. And, for a generation of now out-of-touch leaders it represents a possible return to the good old days of the wonderfully familiar Cold War: the two dinosaurs, NATO and Putin's Russia, are once again in blessed conflict, vying for their rightful share of global influence.

As NATO continues its visionless expansion, Georgia and other post-Soviet nations will most likely continue (mostly for internal political purposes disconnected from global reality) to inflame tensions with Moscow driving perhaps toward an Archduke Fernandian replay in which a seemingly minor incident throws the world into a global conflagration...

Apr 30 2008

A second global axis arises...Iran looks east and so do others

GPB: Iran is turning to Asia and China with its "Look East" policy. Why? What does it mean for the US, the UN and Europe?

Kaveh Afrasiabi: Iran's Look East policy has its roots directly in the Islamic Revolution, which shares an upgraded version of the type of Third World thinking associated with the Non-Aligned Movement. Under President Ahmadinejad, Look East has evolved and grown more effective, thanks in part to the contributions of foreign policy strategists such as Sheikh Attar, a current deputy foreign minister. This is partly in reaction to the foreign policy shortcomings of Khatami era...particularly the failure to achieve detente with the West and the US...and partly in response to Western-imposed UN sanctions. Look East was created to counter the US-induced policy of isolating Iran, and to demonstrate to the world Iran's ability to play a pivotal role in the region and beyond as a responsible and assertive player. Iran's Look East orientation to some extent mirrors India's Look East approach and, thus, provides a cognitive synergy between the two countries, both of whom aspire to join the regional Shanghai Cooperation Organization (SCO). Iran favors a larger role for India at the UN Security Council and New Delhi has exercised an even-handed approach toward Tehran, calling for the IAEA to be the main instrument for dealing with Iran's nuclear program. Symbolically too, the shared external aspirations of Iran and India, crystallized in the Look East approach, cements a friendly relationship based on mutual interests and a shared sensitivity for each other's foreign policy concerns. Some believe China too can be 'roped in' to a Look East approach which follows the prescriptions of the 'harmony of civilizations' concept...this resulting in closer regional ties in today's era of economic globalization.

GPB: What are the diplomatic benefits of Look East?

Kaveh Afrasiabi: For one thing, Look East puts the US on the defensive and forces Washington to re-think its hawkish anti-Iran policy. With an Iran tied securely into the region, then a one dimensional antagonistic US policy is bound to hurt US relations with India, Pakistan, and other countries with a Look East orientation. Additionally, Look East not only strengthens Iran's diplomacy vis-a-vis the US (and Israel), it undermines US 'cold war' politics of regional alignment against Iran and actually gives radicals a new influence and power over moderates in the area, while simultaneously exerting a moderating influence on the radicals themselves.. When this is combined with a new Iranian flexibility relative to nuclear talks (as reflected in the extensive Iran trips this month by top IAEA officials) we see many "moderate" governments bolstering their connections to Tehran. Beyond this, Look East and the new economic interdependence between India and Iran serve India's interest by allowing it to play a more powerful role in mediating regional and international tensions.

GPB: Does the Shi'ite population in India feel connected to Iran... and if so, how does this impact Indian politics?

Kaveh Afrasiabi: India's 25 million or so Shiites, concentrated in Uttar Pradesh, Punjab, Kashmir, Mumbai, etc., are either Ismaiils or Twevler Imamis (as are the Iranians), and on the whole represent a thriving and vibrant 'minority within a minority' that has benefited from the recent "Shiite revival" in Iran and elsewhere in the Middle East. While not a monololithic entity by any means, India's Shiite population (which includes a growing secular middle class) nonetheless has its own special interests and sub-loyalties. These factor into India's local and national, as well as foreign, politics. In terms of the ethnic pressures on India's foreign policy, both directly and more so indirectly, the influence of India's Shiites in steering New Delhi in favor of the Shiite-led governments in Tehran and Baghdad is actually real. Empowered by what they see as a growing Shia influence across the region, India's Shiites as other Shiites across the globe, though they may not agree with the theocratic rampart of Iran's political system, believe that it may finally be the time for their people. While the word 'lobbying' may not be entirely appropriate here, it is fair to say that we should expect in coming months increased pro-Iran pressure on the Indian government by the nation's Shiites. This will grow if India's reasonably strong Shiite business community manages to take advantage of the new era of Iran-India economic relations that is seemingly in the offing.

Is there any real possibility that China could get involved in the IPI pipeline? Is it a plausible option for Iran and Pakistan, if India drops out?

Kaveh Afrasiabi: Well, it seems that Pakistan's recent bid to involve China was a minor catalyst in getting New Delhi to overcome its temporary cold feet on the pipeline project. China's companies can certainly participate in various aspects of this project and Beijing may also get involved with the financial side of things (as hoped for by Islamabad and Tehran). India may hesitate to endorse a role for China in the IPI project, but at the moment China-India relations appear on a healthy track and this could actually deepen New Delhi's ties with Beijing. However, one should not lose sight of the potentially complicating complexities of India-China relations (e.g., New Delhi is not particularly thrilled by China's recent offer of nuclear assistance to Pakistan). India may perceive China's footprint in the IPI as primarily benefiting China's foreign policy aims to the detriment of India's interests. As a result, we should not expect more than a marginal role by China in this project, nor is the near-term prospect of extending this pipeline to China realistic in the absence of even a feasibility study.

GPB: How long will it take to build the IPI pipeline. How long will it be before Iran sees the benefits?

Kaveh Afrasiabi: The plan is to get the IPI pipeline operational by 2013, assuming the deal is finalized very soon and no construction impediments arise. The 2005 term sheet for the pipeline calls for it to supply 2 billion cubic feet of gas per day, with periodic review of the prices using Japan crude oil cocktail as the benchmark. Iran has already begun constructing its side of the IPI pipeline, stretching from the South Pars field to the Iran-Pakistan border, and will start benefiting the moment it delivers gas, reportedly priced at $4.3 per million British thermal units (mmbtu). But of course, the benefits of IPI transcend limited economics and directly contribute to the lofty objective of durable peace in the region and, by implication, the world. This would be a first and would be unique in: a) Fostering a new spirit of regional cooperation; and, (b) building confidence among Iran and its neighbors and near-neighbors such as India and China; and c) building cooperation between the traditional rivals, India and Pakistan. Thus, as a result of IPI project, Iran is now poised to play an effective mediating role betweeen Islamabad and New Delhi.

Kaveh Afrasiabi, a frequent GPB contributor, is a prolific writer and political scientist who has taught at Tehran University and Boston University. He is the author of numerous books and is a columnist whose writings appear regularly in the publications as diverse as The Asia Times, the New York Times and the International Herald Tribune. His latest book is "Readings in Iran's Foreign policy". ..

Apr 26 2008

Making nice with the West to make deals with Russia:

At the United Nations Security Council meeting this week Libyan Deputy Ambassador Ibrahim Dabbashi compared the situation in Gaza to that of Nazi concentration camps during World War II, prompting delegates from the United States, United Kingdom and France to walk out. When asked to confirm or amend his statement, Dabbashi told the press that the Gazan situation was actually worse, given Israel's daily bombings of the territory. He explained that his statement was intended to urge the Security Council, of which Libya is a two-year member, to take humanitarian action on Gaza. His remark obviously got the opposite result.

Meanwhile, in the first visit of a Russian President president to Libya, Vladimir Putin cancelled Libya's Soviet-era debts to Russia, an amount totalling $4.5 billion, and the two countries have agreed to unprecedented trade deals. Russia's state-owned rail company signed a US$3.5 billion deal to build a railway in eastern Libya. The two countries started negotiations on a US$2-4 billion weapons deal and agreed to a coordinate natural gas trades in which Russia would manage some Libyan natural gas being shipped to Europe. Libya has already expressed its support for Putin's plans (however unlikely) to form a "Gas OPEC" with other gas-rich states like Iran and Algeria. In addition, Russia will likely build a pipeline from Nigeria to Libya (see today's Russia articles). Of course, all of these actions serve to tighten Russia's already-strong grip on European energy sources. They also serve to show that Libya, with its massive deposits of oil and natural gas, is ready and willing to make shrewd plays on the international geopolitical stage.

Raising the holocaust at the UN contrasted with shrewd strategic moves on the international stage ? one incendiary and the other shrewd and businesslike ? typify the contradiction of Libya's leadership. Indeed, during the past five years, Libyan stongman Muammar Qadhafi, the former pariah of the western world, has often navigated a shifting geopolitical landscape with deft diplomacy and extraordinary humility. At other times, Libya has been helplessly blunt and clumsy...remember the incident, infamous among Arab leaders, of Qadhafi walking out of the opening of the 2004 Arab League summit explaining he didn't agree with the agenda, saying "I stand beside the Arab peoples, not with the Arab governments."
Given the reputation of Qadhafi and his complex forty-year reign, Libya has proven unique among traditional Middle Eastern enemies of the United States most of whom have frigid relations with the US. While Iran, Syria and others have been targets of the Bush Administration and its War on Terror, the years since September 11, 2001 have seen a rapprochement between Washington and Tripoli. Although, reconciliation between Libya and the West first began in 1999 after Libya turned over 2 of its citizens to be tried in The Hague for their roles in the 1988 Pan Am Flight 103 Lockerbie bombing, the real changes took place after Bush came to power in Washington in 2001. Libya first agreed to disband its terror training camps which were famous for their ties to groups such as ETA, the IRA, PLO, and other insurgent organizations around the world. In 2003, Libya accepted responsibility for Pan Am 103, agreed to pay the victims' families US$2.7 million in reparations. Most importantly, Libya then formally gave up all of its programs for weapons of mass destruction. The timing was extraordinary given the desire of the US Administration to show some type of victory resulting from its otherwise disastrous War on Terror. After a series of actions aimed at normalizing diplomatic relations, US Secretary of State Condoleezza Rice announced last year that Libya was taken off the State Department's list of state sponsors of terror...freeing Libya from sanctions and other economic restrictions.

So what explains Libya's contradictions...its shrewd deals with Russia, its public relations blunders...but most importantly its concessions to the US? After all, it is likely difficult for Qadhafi to forget the bombing campaign ordered by US President Reagan in 1986 unleashed over his presidential complex that killed his daughter and would have killed him as well were he not sleeping in a tent in his backyard. Perhaps it is Qadhafi's pragmatism in combination with his knowledge of the economic dissatisfaction of his citizens that influenced his decision to "make nice" with the West. After all, by the late 1990's oil-rich Libya was, according to complaints made to the UN (see today's Russia articles), suffering under the weight of heavy sanctions. Unable to sell its plentiful resources, Libya was missing out on most markets. As the past 20 years have seen a surge of 47% in global energy consumption, Libya has been keenly aware of the opportunities this presents. As rapprochement with the West has freed it, Libya has capitalized...of course, as is typical, the partner has not been the West, but Russia (likely to the detriment of the West).

Qadhafi has always been a survivor and, perhaps alone among Arab leaders, he's made a smooth and savvy about face, engaging with the world and seeking moderation and progress in Libyan society. The question after all of these events remains, has Libya really changed. Or has the clever Qadhafi simply realized freed itself from Western constraints in order to form new alliances, particularly in energy, that will ultimately turn the tables on Europe and the US.

As the comments of Ibrahim Dabbashi at the Security Council last week show, Libya either doesn't yet get Western sensibilities or it is playing to other audiences. But it does understand what is necessary to survive and perhaps do better in a world of new alliances and the power politics of trade and energy.

Libya and Qadhafi, always colorful, have played the apple gone good...they're about the only ones in their neighborhood who have successfully made the transition. But then, perhaps they've learned that you don't beat the US militarily. If you want to beat the US, be nice and then take advantage of US foreign policy ineptness to win the political, trade and energy endgames.

..

Apr 22 2008

Five global issues to watch during the rest of 2008

If some make you nervous, you're not alone. But there are also bright spots. Tell us what makes you nervous about...or what gives you confidence in...the near to mid term future.

• Bad: A terror strike on US soil in the 60 days prior to the US Presidential election. The systems underlying the GPB do measure the likelihood of a terror strike against US interests. That proprietary index spikes during the 60 days preceding this year's US election. Just before Spain's 2004 election, terrorists bombed Madrid commuter trains killing nearly 200 people. Osama bin Laden issued a statement prior to the 2004 US Presidential elections that worked to the advantage of George W. Bush, not coincidentally the candidate that would clearly continue the chaos in the Middle East, much to the advantage of al Qaeda. In 2008, a statement alone won't likely do the trick of electing John McCain, the candidate that has promised to continue US policies that have created the chaos so critical to the political goals of radical Islamists. It's doubtful even a devastating attack against US interests overseas would be enough. So, though it's by no means certain, the numbers suggest that a terror attack on US soil would serve al Qaeda interests this year.
  
• Bad: Dramatically increasing global resource use that is already resulting in significant inflationary pressures, a continued rise in competition for scarce commodities, spot shortages and hoarding, and increasing vulnerability to dangerous shortages in the event of severe weather. This applies to resources from industrial metals to fuels to food. While few analysts believe resource competition will lead in 2008 to international confrontations, many believe food riots will increase this year to the point of destabilizing some governments and that the next 18 months could set the stage for potentially dangerous international confrontations in the next 3-5 years.
  
• Good: The breathtaking increase in Green Technology investment over the past 5 years. The dean of Silicon Valley venture capitalists, John Doerr of Kleiner, Perkins, Caufield & Byer has called it the "mother of all markets" dwarfing the internet opportunity. Energy alone is a US$6 trillion market according to Doerr. Coming from the investors that brought Amazon and Google to market, that's a strong endorsement. Green Technology won't change the world in 2008 or probably not in 2009. However, advances are happening quickly in hybrid, battery, and capacitor technologies, developments in alternatives to corn-based biofuels efficiently using waste products, as well as the commercialization of solar and wind power (legendary Texas oil man T. Boone Pickens plans to spend $10.7 billion to build the world's largest wind farm...and make money at it). Assuming energy prices stay high, which most analysts believe they will, the investment flow will continue and perhaps as soon as 2-3 years, technological breakthroughs will occur. Of course, this assumes politicians resist the disastrous urge to subsidize energy costs. China and other countries are already subsidizing gas and Republican Presidential candidate John McCain has suggested a subsidy by at least temporarily reducing the Federal gas tax.
  
• Good: The rise of the "Millennial Generation", which could prove to be a savior generation. After Baby Boomers and Generation X gave new meaning to the terms excess, self indulgence and irresponsibility, signs are that members of the global Millennial Generation (born from 1981 to the mid-90's) may actually be up to the task of addressing the problems and debt created by the last two generations. The Millennial Generation, raised in newly connected world where problems can no longer be hidden, appears not just to be volunteering more (and more creatively), but it is using continually evolving connectivity tools in ways that are already changing dramatically global social and political dynamics.
  
• Good or Bad (or both): The change of US Administrations. To relief of most of the world, the White House will change occupants in January, 2009. Democratic Presidential candidate Senator Barak Obama said recently that any of the current three candidates (Obama, Clinton or McCain) would be an improvement over the current Administration. Maybe...but at least in the foreign policy arena, that will depend upon whether the new President can articulate immediately after the election a coherent, realistic foreign policy vision that is both a clear break with the disastrous policies of the last 8 years and a strong, innovative new direction that captures the attention and approval of the world. The new President, whomever that might be, will have a very short honeymoon (perhaps ending as early as the inauguration) during which to prove the US can again become a competent, strong, effective global player. Taking advantage of the honeymoon, however short, will require the President hit the road running full speed...that's why a foreign policy vision will need to be articulated even before inauguration. But the President will need to assemble and put in place a new foreign policy team that understands how the world has changed in the last 15 years. From the Secretary of State to ambassadors to diplomats, the world will be watching to see if the President installs serious people who can craft and execute a bold foreign policy that will help the US recapture some of its lost influence. At this point, John McCain has promised more of same. Hillary Clinton has said she'll change things slowly by making deals with Washington insiders and has not suggested that she would recruit the kind of new talent that could regain lost influence. Barak Obama has promised change but has not shown anyone that he is capable of actually crafting a program of effective change or hiring the right people to execute a bold new vision.

Apr 17 2008

A note on the food crisis observation: This week's food crisis observation by Tom Waldeck generated both excellent comments and postings that added solid information to the discussion. Thank you to our brilliant set of commenters. This issue won't unfortunately go away any time soon so we'll revisit the topic in the near future. Please note that the observation and comments can be accessed by clicking on the archives below. (DRGI staff)

China's energy appetite is growing...so is its pollution

Just this week, professors from the University of California published a study in the Journal of Environmental Economics and Management showing that China has surpassed the United States in carbon emissions. They won that dubious honor perhaps as early as 2006. They weren't projected to surpass the US until 2020. Another mega-polluting power is bad enough news but this time the leading polluter is not an "industrialized" country but a "developing" one. This means is that China's thirst for energy will not reach equilibrium for some time...and that's bad bad news.

Behind China's hazy cloud of carbon gasses is troubling evidence that China continues to expand its appetite for and grip on global energy. So, while the United States might feel a bit less guilty now that it's the number 2 rather than number 1 global polluter, Americans can take no comfort in the present situtation. China's aggressive approach, and its appetite for long-term oil and gas contracts is threatening both the environment and global resource distribution.

So, just how much is China consuming and how does it affect global economy and politics?

Few people need to be reminded of China's dramatically expanding consumerism or the power of its financial muscle. As automobile ownership has skyrocketed, as China's airline industry has blossomed, as construction has soared, Chinese consumers have become increasingly dependent on oil to fuel their needs. China's already large oil producing sector has grown over recent years, but within the past decade, China has switched from being a net exporter of oil to becoming the world's second-largest importer. The China Petroleum and Chemical Industry Association reported that in 2007, 46.05 percent of China's crude oil consumption had to be met by imports.

This growth of course means that Beijing has been eager to secure stable markets from which it can obtain oil and gas. Africa, Central Asia, the Middle East, South East Asia, Central and South America have all come under China's ravenous eye. This insatiable drive to obtain energy combined with a complete amorality in politics has made China the power to beat for energy resources:

• China's interest in Iranian oil fields has made it a difficult but essential arbiter to the Iranian nuclear stand-off; there have even been reports (denied by Iran but still circulating) that China may even create a military base in Iran.
• China is now the happy manager of the Panama Canal; and has relentlessly pursued energy, arms and political deals with oil-rich Venezuela.
• China has said that it will gladly take over the Indian end of the much-touted Iran-Pakistan-India pipeline (a prospect being seriously pursued as illustrated by the prominence of this discussion during Pakistani President Musharraf's current visit to Beijing)
• Many analysts say that the sticking point for the expansion of the Shanghai Cooperation Organization (SCO) is China's blatant courting of Turkmenistan and Kazakhstan for their oil fields, thus irking an ambitious Russia eager to re-consolidate its influence in Central Asia
• Even in Iraq China has been very vocal in trying to validate its Saddam-era deal to develop Wasit Province's oil fields, thus leaving its imprint on the ever-complicated and elusive new Iraqi oil law. China does not share the caution of US oil companies in seeking to secure Iraqi oil resources.
• And, with China development dollars has come a new model of no questions asked "amoral investing." Sudanese oil is one of China's most controversial commodities. China has also insulated Myanmar's repressive military junta. Myanmar's resources and geography are essential for China to ensure that it has the upper hand in exploiting the energy rich Malacca Straits and ensuring an alternative route for goods other than the South China Sea (remember Beijing's silence during the September 2007 "Saffron revolution").

Apr 12 2008

Will the price of food drive global politics in coming years?

Amidst a growing global economic crisis, the world's grain and food supply has reached the level of a perfect storm -- demand is rising, inventories have been depleted, and supplies are at constant peril of falling short of needs

This is truly a food crisis. According to International monetary Fund Managing Director Dominique Strauss-Kahn, "Food prices...increased by 48 percent since the end of 2006 and 65% since 2002, which is a huge increase, and it may undermine all the gains we have obtained in reducing poverty." (Reuters)

The crisis has multiple causes and it demonstrates the inefficiency of the free market to hold inventories in a strategic industry. Grain and food reserves are treated differently than for example the Strategic Petroleum Reserve. In previous years, government programs that built surplus supplies cushioned food shortages and avoided price spikes by accumulating grain inventories through various programs (e.g. Commodity Credit Corporation). These inventories represented the best insurance against the vagaries of weather, crop diseases, and mis-steps in planting decisions of the world's farmers.

In recent years, these reserve programs have disappeared and just-in-time inventory regimes have seen our once comforting cushion against shortages vanish. Today we live in a quickly changing world of dramatically increasing demand for more calories and higher quality diets from a burgeoning middle class in China, India and across the developing world. Rising demand and limits to productive resources and supplies have caused prices to more than double for grains and oilseeds in just two short years. According to The Boston Globe, "After nearly two decades of low food inflation, prices for staples such as bread, milk, eggs, and flour are surging in the past year at double-digit rates. Milk prices, for example increased 26 percent over the past year in the US and the UN reports that dairy prices globally increased 80% in 2007. Egg prices jumped 40 percent." Technology advances have been unable to keep pace with the growth in demand. Add to this mix unpredictable production due to weather conditions and it becomes clearer why prices have moved to their present levels.

There's another critical influence on rising food prices. The energy shortage (or rather the gasoline and distillate shortage) is drawing food supplies into the energy consumption mix. This is a regressive tax and makes bio fuels a poor solution to the shortage of fuel. The added cost of food globally is a tax that, when added to the cost of producing bio fuels, makes the macro economic model of converting food into fuel a failure. In the larger picture the internal combustion engine has sharply raised the cost of energy and food. Replace the internal combustion engine with electric power and both high crude oil prices and high food prices can relax considerably. Electricity can be produced cleaner, cheaper and can be produced with alternative fuels (nuclear, solar, wind, coal, hydro). New electric storage technology (e.g., new batteries or the use of capacitors) is on the horizon and will also help contribute to eliminating the need to use food for fuel.

Inefficiencies in US financial markets and a weakened dollar are also contributing to the rise in food prices. The weak dollar has raised the real price of those commodities priced in dollars. In non dollar hard currency terms the rise in grain and food prices has been more subdued. But the G10 and G20 money supply (these are the key global measures of how much money is circulating in the world economy) have been growing at rapid rates, flooding the markets with liquidity and devaluing the purchasing power of all money- a backdoor to inflation, and a back door tax on anyone holding money instead of hard assets.

It is hard to look at the food and grain situation without looking closely at the cost of the inputs that go into their production . Fuel, fertilizer, machinery, insurance, credit, seed costs have all risen dramatically. Labor is harder to find at reasonable cost, particularly where greater skills are required, such as they are in the modern US farm.

As global inventories of grain (rice, wheat,coarse grains and other small grains) and oilseeds as a percent of consumption hit record lows, there is a greater and obvious danger. Skyrocketing food prices have moved these critical economic imbalances into the political arena. No country can afford the political consequences of run away food prices, particularly in the third world countries where food represents about 40% of the consumers budget (Nigerians spend 73% of their budgets on food, the Vietnamese 65%...New York Times). And when food prices rise, the natural reaction to protect domestic food supplies and to lower prices can exacerbate the problem. Importing countries may increase food imports and attempt to build supplies to force lower prices in their countries. Exporting countries may restrict their food exports to prevent rising world prices from elevating their local prices. Both these conditions exist actively in the current environment and both activities actually add fuel to the upward pressure on prices. It is the hoarding instinct that drives prices higher than the market would expect and, in a vicious circle, puts more pressure on governments. Reuters reported this week that if inflation in India (which rose to 7% in March) is not contained, "consumer anger could shape India's political future as its 1 billion plus people gear up for general elections sometime between October and May..."

Global population growth over the next 40 years will make the job of providing sufficient food even harder. The world's population will increase by 2.5 billion to reach 9 billion from a current level of about 6.5 billion. Without any improvement in the quality of diets, food and grain production would have to rise 38% just to stay even with today's consumption patterns. Growing enough food will be a daunting task considering the limitations of agricultural resources, mainly arable land and water. It will also present huge strategic and political problems as countries vie for fresh water and adequate food supplies.

There is some benefit of rising prices for those countries that are net exporters of food and grain. The U.S. trade balance is helped by the greater revenue from our large export base. The farm economy is thriving even though the overall economy is suffering, a situation quite different from the historical condition of a marginally profitable agricultural economy and a thriving industrial and service economy.

Good weather for the next year in most major producing areas could temper the price outlook. On the other hand major weather problems this coming summer could send the price spiral out of control, particularly considering the critically low level of world wide inventories. In the longer term, shortages of productive land, the declining supply of irrigation water in parts of the world combined with rising costs of production and rising demand will likely dominate the world's agricultural situation. A major reversal of the weak dollar would be helpful in subduing some of the inflationary pressures in the US. But don't look for a repeat of the days of cheap and abundant food. For the moment weather anomalies and a rapidly changing demand situation have stretched the planet's resources...there may well be more pain to come.

Tom Waldeck, a retired executive of Continental Grain Company, spent years in the US and overseas as a grain merchant. With a bachelor's degree from Cornell University and a master's from the University of California at Berkeley both in agricultural economics, he has spent time as a dairy farmer in upstate New York and is presently a rancher in Colorado...

Apr 8 2008

Right of Return...the stumbling block to peace of refugees in Lebanon, Jordan and Syria:

On Tuesday, jailed senior Palestinian leader Marwan Barghuti sent a letter to the Israel Peace Now movement to mark the celebration of its 30th anniversary. In the letter he stated: "The vast majority of the Palestinian people, myself included, are ready for a historic reconciliation based on international resolutions that will result in the establishment of two states." Coming from Barghuti, the mastermind behind the 2000 al-Aqsa Intifada jailed for 5 life sentences in an Israeli prison, this letter is a bit of a surprise. However, it begs these questions: Is this just more rhetoric? Is it an actual proposition for peace, or will this gesture of goodwill fall by the wayside as Hamas in Gaza and the Israeli Defense Forces have it out? And, even if Palestinians in the West Bank and Gaza forge an unlikely peace with Israel, would peace even be relevant? This success would still be overshadowed by the issue of oft-forgotten Palestinian refugees living in many cases since 1947 in countries neighboring Israel.

Our contributor Khairi Janbek writes from Paris on this issue:

Settling Palestinian Refugees in their Host Countries

The more talk of a Palestinian state gains momentum, the more the issue of settling Palestinian refugees, especially in Lebanon, Jordan, and Syria, becomes prominent. Let's look at how resettlement might be accomplished, if it can be at all.

Lebanon:

There are currently almost 405,000 Palestinian refugees situated in refugee camps in Lebanon (which has a total population of 3.35 million inside the country, and approximately 1 million living overseas). These refugees are not considered Lebanese citizens and are therefore prohibited from conducting any economic activity outside the camps. Their presence creates two important challenges for Lebanon:

• An internal security challenge. As the official Lebanese discourse indicates, the various camps have become an oasis of freedom for the various armed Palestinian groups ranging from Mr. Abbas' Fatah and left-wing guerilla organizations, to Hamas, Fatah al-Islam, and even more extremist religious groups.
  
• The external challenge of peace with Israel. Lebanon cannot pursue an effective peace strategy with Israel so long as the question of right of return of the Palestinian refugees remains unresolved, consequently compounding the particularly Lebanese sectarian formula of power-sharing.

Apr 4 2008

Handicapping the US Presidential race...the world has a lot at stake. The GPB has assiduously avoided reporting on the US Presidential elections for several reasons. First, there isn't a media outlet in the United States that isn't reporting on the elections...24 hours/day, 7 days/week. However, several of our loyal and wonderful readers have asked in emails what we think. Who wins the US election will have a profound effect, good or bad, on the world for years to come. The next President will either begin to restore US credibility and influence or he/she will compound the errors of the Bush Administration...we don't even want to consider the result of that.

In a spirit of disclosure, we should reveal that Denver Research Group's (DRGI) President began his career as a senior member of a Washington, DC political firm that had prominent roles in the first McCain Congressional campaigns and has over the years compiled a record of more than 100 election wins, primarily for Republican candidates. DRGI staff is composed mostly of Democrats and Independents. However, we all believe, as most of America, dramatic changes in US policy are needed to recover the global influence of the US.

That said, conventional wisdom predicts an Obama/McCain race unless Senator Clinton wins nearly every one of the remaining primaries by margins big enough to convince Democrat leaders that the momentum has switched. Polls say a race between Obama and McCain would be tight. The Clinton campaign claims Senator Clinton (supported by some polling) would have an edge in the must-win swing states such as Ohio and Florida. NBC's political guru Tim Russert using his famous vote maps has laid out a plausible scenario in which the electoral vote could tie at 269 each for Obama and McCain. A recent Gallup Poll found that Democrats by a margin of 59-30 believe Senator Obama would have a better chance of beating Senator McCain. Republicans believe by a margin of 64-22 that Senator McCain would have a better chance of beating Senator Clinton than Senator Obama. However, polling asking voters which candidate they would vote for find the races between McCain/Obama and McCain/Clinton virtually tied.

Yet, in recent days, Republican consultants have begun to say publicly what DRGI has found in its conversations over past months that Senator Obama could have a "glass jaw" (an old American boxing term suggesting one good punch to the jaw would knock him out). The reasons are several: 1) Senator Obama's voting record as an elected official is more liberal than Senator Clinton; 2) Both Senators McCain and Clinton are viewed as stronger, more experienced commanders-in-chief (important particularly if there is a terror strike on the US before the election); 3) Senator Obama is black, and despite polls showing US voters are unaffected by a candidate's race, many political consultants believe that this is in fact untrue. Indeed, recent tensions over Senator Obama's link to the radical and outspoken black Pastor Wright have underscored much of America's unease with Senator Obama's race when they are in fact reminded of his color; 4) Senator Obama's full name is Barak Hussein Obama, a name that most Americans (wrongly) would not identify as typically "American"; some even make the assumption that Senator Obama is Muslim, which sadly is currently an unacceptable religion (to an American electorate that had great difficulty in electing the Catholic John F. Kennedy) for an American Presidential candidate (for your information, Senator Obama is a Christian but according to a recent Pew poll, 10% of Americans believe Senator Obama is a Muslim...only 53% identify him as a Christian).

While clearly unfair, Senator Obama's race, confusion over his religion (among both parties) and vulnerability on his strength as a commander-in-chief makes fertile territory for a conservative smear machine that, despite a view among some liberal analysts that America is tired of negative politics, is still highly effective.

Conventional wisdom among analysts is that if the economy tanks this summer (which the GPB believes is very possible) and consumer confidence falls further, either Senator Clinton or Senator Obama would beat Senator McCain. Indeed, with 81% of Americans in the latest New York Times/CBS News poll believing the country is on the wrong track, it may be impossible for a Republican to win at all. However, if the economy improves in the second half of 2008, the scenario of a tied electoral college that NBC's Russert described, could well play out. If that occurs, and if Senator Obama is effectively "swift-boated" (a reference to the smear campaign against Democratic Presidential candidate John Kerry's war record in the 2004 Presidential campaign), the election could unfortunately come down to a decision made on race, religion, national security fears and age.

While it's tough to say how a decision should be made on Presidential candidates, the views of the international analyst audience that the GPB monitors can be summarized as follows:

• Both Senators McCain and Clinton are viewed as more experienced but less able to properly judge the world as it has evolved over the last 20 years. There is great fear that a McCain Presidency would continue the disastrous policies of the Bush Administration that have kept the world in the state of violent chaos that feeds terror groups...they feel Senator McCain would clearly be Osama bin Laden's choice. Many view Senator Clinton as embracing an old set of advisors now out of touch with an Internet-connected world. They worry that Senator Clinton while perhaps more experienced than Senator Obama simply would not have the judgment or the strategic abilities to craft the visionary policies necessary to restore global confidence in the US.
• Many analysts believe Senator Obama if elected would on day one present to the world a new, global face that could open the door to bold foreign policy initiatives...perhaps extending the honeymoon period for the new President from the 3 months Senator McCain would have or the 6 months Senator Clinton would have to a year or more. However, the jury is still way out as to whether Senator Obama is capable of taking strategic advantage of the assets he would bring US foreign policy. While his campaign has been effective, few analysts based on Senator Obama's pronouncement to date will venture whether he has the strategic ability to craft visionary policies himself.
• Few foreign analysts see any of the Presidential candidates as surrounding themselves with the innovative strategists that can capitalize on the critical honeymoon period in early 2009. Many believe they can guess the foreign policy team of Senators Clinton and McCain and they are not impressed. Few know from whom Senator Obama would take advice. None have ventured who Senator Obama might appoint for the critical job of revitalizing a demoralized State Department that has been viewed at best as an incompetent non-entity for nearly 8 years. Until Senator Obama gives a reasonable indication about the composition of his foreign policy team few global analysts will judge whether Mr. Obama can manage US foreign policy.

Mar 31 2008

Back to the future...will the new tribalism dictate global relationships until the next Cold War?

In the days of the Cold War, life was relatively simple. The world had two superpowers that could annihilate all humankind. There were lots of conflicts in individual countries but as far as fear goes, nothing could beat nuclear winter. It united us and kept us all pretty well focused.

At the end of the Cold War, we all breathed a sigh of relief and as the world moved into a period of unprecedented economic growth, global conflict declined significantly. But are we headed for a new era that will make us wish for the days of "duck and cover" (the slogan used in US schools suggesting that students would be protected from nuclear explosions if they hid under their desks)? A growing chorus of analysts are suggesting that the world is entering a new period of complexity and uncertainty that will make global politics infinitely more difficult and provide fertile ground for growing conflict.

The concern among cutting edge analysts is that absent the unifying fear of nuclear conflict among two clearly defined superpowers, the world has over 20 years begun reverting to much lower common denominator of social organization...tribes. Writing in The New York Times March 10 of this year, author and Times Foreign Editor Roger Cohen asked if the world was beyond tribalism. He answered by saying "Wrong. The main forces in the world today are the modernizing, barrier-breaking sweep of globalization and the tribal reaction to it, which lies in the assertion of religious, national, linguistic, racial or ethnic identity against the unifying technological tide."

Writing in mid-January of this year, Newsweek International Editor Fareed Zakaria said "With the end of the battle of ideologies -- communism, socialism, liberalism -- human beings' oldest identities have moved to the core of politics." The Global Power Barometer first wrote in late 2006 about the devolution of community interest from the nation-state to the tribal state or to collections of tribes united by ethnic or common religious interests or even economics. Human interaction once worked this way...can it work again in the 21st Century?

The manifestations of tribalism can be seen on a macro level in the rise of regionalism and the degeneration political civility in the US. It can be seen in growth of secessionist movements across the world. When South Africa takes over leadership in April of the UN Security Council, it will face the Kosovo independence decision, a decision that will affect similar movements across the world. Russia fears a drive toward independence of Chechnya. Spain fears independence of the Basque region. The world will continue to watch the unfolding drive for Tibet's independence. Iraq, Cabinda Province in Angola, the island of Anjouan in Comoros, Ethiopia's Ogaden region Darfur, the Touareg in Mali, the Congo...the list of nation-states that could break apart goes on and on.

The politics of tribalism is finding its way into the ongoing business of international relations. Russia has carefully used the threat of supporting the independence of Abkhazia and South Ossetia to pressure Georgia not to join NATO. Somalia has been governed by the most elemental tribal levels for 16 years as national governance has failed, leaving room for religious movements such as the Union of Islamic Courts (UIC) to unite the nation...that is until the US decided it was more appropriate to leave governance to the tribal level than the Islamists and threw out the UIC.

In Iraq, where Sunnis, Kurds and Shia are battling each other and themselves for independent control within a nation-state that probably should never have been created in the first place, the US has resorted to paying off tribal elements through its program of forming "awakening councils" to restore security in various regions. The US has taken the same approach in Afghanistan by providing radios, phones and cash to tribal leaders in an initiative ironically called the "Afghan Social Outreach Program."

Even as the major powers attempt to use tribalism to control political movements they don't like, tribalism is rearing its ugly head in both the US and Europe as immigrant communities assimilate less and even use their new homes to encourage secessionist movements their native countries.

Some hope economic growth and elections will reduce tendencies toward tribalism but as Newsweek and PostGlobal editor Fareed Zakaria suggested economic growth seems "to go happily hand in hand" with the assertion of identity. Elections in a tribal world tend to see the best organized tribal elements winning as we've seen with the election victories of Islamists over the past decade.

The Internet has perhaps been the supreme enabler of tribalism as it has allowed tribal members wherever they are in the world to communicate, inspire, share and embellish indignities, plot strategy and avoid the necessity to assimilate.

Over the past century, the nation-state encompassing diverse populations has created Cold Wars but has also generally kept chaos and anarchy in check, forcing compromise and distributing wealth within nations. As the world fractures into smaller more homogeneous units, analysts believe nations will shrink, their numbers will grow and they will specialize. There will be winners and losers based on natural resource ownership and skills of their populations. It's too early to tell whether that will result in a more or less stable world. However, many cutting-edge analysts believe the transition to a more tribal world will carry great risk of rising conflict. And, as the US military and many others have learned, the skills required to deal, live and relate in this new (but also ancient) model will be very very different than those of the last century. Those who learn them first will be the winners...

Mar 24 2008

Abkhazia and South Ossetia ? Did you even know what they were?

One of the key issues that has been driving the news since the fall of the Soviet Union has been the ongoing relationship and tension between NATO and Moscow. Originally NATO was set up as an organization to counter the influence of the United Soviet Socialist Republics and its influence over the Eastern Bloc nations from Bulgaria to Poland. Once the Iron Curtain fell with the dissolution of the Warsaw Pact in 1991, NATO was in some ways forced to reinvent itself, and over the course of the 1990s it did so mainly as a "peacekeeping" force in the former Yugoslavia, aiming at ending the conflict in the Balkans. As former communist nations began to look west and consider European Union membership, these countries then joined NATO. Poland, the Czech Republic and Hungary joined in 1999. In 2004, NATO accepted the membership of several other eastern European nations, including the former Soviet republics of Estonia, Latvia and Lithuania.  Although NATO has shifted its focus towards peacekeeping, and, since September 11, 2001, to the War on Terror and increased activity in the Middle East, one cannot help but notice that it seems NATO's original intention - to counter the influence of Moscow - is still in place. And as the resurgent Russia continues to gain power, especially over energy, NATO is continuing to return to this focus.

In this context, the past month has seen a good deal of controversy as two more former Soviet nations look to be on the verge of NATO membership. These nations are Ukraine and Georgia, both currently with western-leaning governments and strained relationships with Moscow. Moscow has said several times that it does not approve of these countries, considered to be traditionally within the Russian sphere of influence, joining NATO. It has threatened Ukraine with more controversy in its complicated natural gas and oil pipeline relationship, and over the weekend, the Russian Duma told the Kremlin to recognize the independence of Abkhazia and South Ossetia from Georgia. Read about this most recent statement in the GPB (see today's Russia Articles).

So, what are Abkhazia and South Ossetia and why are they important? When Georgia became an independent country in 1991, it, unlike its neighbors Azerbaijan and Armenia, was mired in civil war for several years. Almost immediately, Abkhazia and South Ossetia started their own rebellions to wrest control from the central government in Tblisi. Both breakaway regions sit on the Russian border and have distinctly different ethnic self-identification from the Georgian majority. And in many ways, Tblisi has not had control of these regions for years, unable to force its own civil society into the breakaway republics and causing various international and Russian peacekeeping forces to intervene at times, especially recently after Abkhazia's 2006 independence declaration and a series of recent conflicts over unidentified planes flying over South Ossetia.

In the past, although Georgia and Russia have had a very rocky relationship, Russia never endorsed independence for these smaller nations because it would cause more instability in the Caucasus, the scene of Russia's most violent rebellions in Chechnya, Ingushetia and Daghestan. Moscow's recognition of South Ossetia and Abkhazia would be an implicit and hypocritical endorsement of the rebellions it has been seeking to quell for nearly two decades but it could well happen if Russia were provoked.

Now, however, Russia is in a new and unique position. Moscow has to make a choice. Which is worse: more instability in the Caucasus with two potential independent nations? or Georgia in NATO? It seems that most Russian strategists see the second issue as more volatile. Russia has years of experience in repressing rebellion in the Caucasus, but the admission of Georgia into NATO could mean even more US interference in the Caucasus particularly with planned missile defense shields right in the Russian backyard. (And perhaps it was for this reason that Moscow has finally relented to substantive talks regarding the Bush Administration's proposed missile shield in Poland and the Czech Republic - which are much farther away than Ukraine and Georgia.)

Moreover, Georgia's President Mikheil ("Misha") Saakashvili can be a loose cannon...and he's not Vladimir Putin's favorite ex-Soviet state leader.  He's impulsive and believes the Bush Admininistration will stand behind democracies even if it means confronting Russia.  He's a friend of Presidential candidate John McCain and if McCain is nominated (not an unreasonable assumption) he may feel the US would spread a protective shield over him.  If Saakashvili oversteps his bounds with South Ossetia or Abhkazia (e.g., he tries to quell the rebellions, particularly by going into either area), watch for a harsh Russian reaction, even invasion.

For now, one can only wait for the drama to unfold. The telling moment will be the upcoming NATO summit in Bucharest, Romania, on April 2-4. If Ukraine and Georgia join in the MAP (Membership Action Plan) program, expect a larger conflict between Russia and the West...

Mar 18 2008

"We're in the fourth inning of a nine inning ball game"...Billionaire real estate developer and editor-and-chief of US News & World Report Mort Zuckerman yesterday on NBC Nightly News; Is the depression to come around the 7th inning?

In late January of 2007, the GPB first projected "a horribly rutted road" ahead for the US economy. Analysts the GPB cited projected a "collapse" in the housing market. In May of 2007, the GPB wrote this in an Observation:

"Economic downturn ahead: We first mentioned the housing crash in January of the 2007 and the potential for a severe US economic downturn in May and November of last year and again in January of this year. More and more analysts are now projecting a difficult time ahead for the economy. The GPB suggests the downturn will be more than a "downturn" but will be a severe recession if not worse. We hate to again use the "perfect storm" analogy but here are the factors we believe are coming together to cause major problems for the US economy in 2008, 2009 and probably 2010:

• A housing collapse both in prices and sales...more than 15% left to go  
• Significant problems for and even possible collapse most likely in early to mid-2009 (or possibly earlier) of the US financial industry based on both the collapse of housing and the proliferation of "derivatives", which essentially are contracts derived from values of other assets (e.g., stocks, real estate, mortgages).  Few of even the most sophisticated financial managers understand or can value these "innovative" financial instruments even as they claim derivatives to be safe (can you say "Enron").  Presently, the outstanding value of these unregulated contracts is estimated to be greater than US$500 trillion...by contrast the entire world's GDP is estimated to by about US$40 trillion.
• A significant global bout with inflation as Chinese consumers demand more...this is inflation the US Fed can do little about and it will hit hard, particularly in the price of food (combined with the use of US farmland to produce fuel).  Yet, this type of inflation will pale in comparison to what will occur if the financial industry hits hard times as suggested in the last bullet...the Fed will have to run the printing presses full time if that occurs. 
• A war bill for Iraq that the GPB has always projected will top US$2 trillion
• Increasing oil prices...they may have fallen at the end of last year but they're on the rise now and fueled by speculation, increasing global tensions, and a falling US dollar they won't come down until the global economy dramatically slows (which may well occur in the waning days of the Bush Administration or next year...remember our view that the DOW could fall into the low 8,000 range in the waning days of the Bush Administration or early next year)
• A falling US dollar...it has a ways to go particularly if the US decides to lower interest rates when the housing market crashes
• Falling US consumer confidence...as housing goes so do many analysts believe consumer confidence will go
• Demographics...the prime demographic for critical consumer spending such as housing (adults 20-60) is in significant decline (not slower growth but actual absolute decline)...expect the anti-immigration crowd to be begging for immigrants (though probably rich ones) as they figure out that fewer and fewer people are coming up behind the baby boomers to support the US economy

Mar 13 2008

A not quite perfect storm may be headed China's way:

On Thursday, Beijing admitted publicly that Tibetan monks were engaged in active protests in the provincial capital of Lhasa, high in the Tibetan highlands. This comes after several days of demonstrations on both Chinese and Indian territory that garnered international attention after security forces in both nations suppressed the protestors. Many human rights groups say that these are the largest pro-Tibet protests since 1989. While Indian forces in Delhi used anti-mob swat teams, and other Indian officials halted hundreds of Tibetan monks on the march back into Chinese territory near the border at Kangra, Chinese forces used tear gas to quell anti-Beijing protests in Lhasa.

Beijing says that it has pacified unrest in its Tibetan province? for now.

As the August Olympic Games approach, protests of this type, from both within and without China, are expected to grow. China continues to be an emerging global giant, with a robust economy, growing foreign policy apparatus, expanding military capabilities and clever diplomatic strategies. The Olympic Games are the pride of China where leaders hope to show off to the world the progress China has made. But will the Olympic Games showcase China or pop its balloon.

Regardless of what happens, no analyst believes the Olympics will threaten Chinese stability. However, there are clouds coming together that could well dampen China's 30-year rise to global power.

First, the Olympics provide groups across the world the opportunity to embarrass an authoritarian government many vehemently dislike. Some human rights advocacy groups now term the Olympics the "Genocide Olymics" calling attention to China's poor human rights record, notably in Tibet and other regions of non-Han ethnicity. The world record holder in the marathon, Haile Gebrselassie of Ethiopia, has refused to run the marathon in Beijing's polluted air. Justine Henin, the world's top-ranked female tennis player and 2004 Oympic gold medalist has said she's considering not playing as a result of air quality problems...all this calling attention to China's terrible record of environmental management.

And, China may use terror as an excuse to crack down on dissidents. The recent hostage taking of Australians in Xi'an and an attempted hijacking and the thwarted terror plot from the Uighur region of Xinjiang Province have given China the excuse for actions that may be necessary but may also result in further condemnation from a skeptical international community.

Equally as important are the economic pressures that are coming to bear. China's golden economy is finally beginning to see the downside of success...inflation, which hit a 12-year high in February of 8.7% (more inflation growth is expected). The People's Bank of China is likely to soon raise rates and reserve requirements again. Some analysts, as the Economist reports, worry that rate rises necessary to curb inflation may cause an overly hard landing for China's exploding economy. While China has new options to deal with inflation, a flattening global economy and the US recession may combine with rampant inflation to cause a real slowdown in Chinese economic growth and a fall in Chinese stocks. Together, these could dim the great expectations of the new Chinese middle class and, with continuing problems caused by the growing economic divide between the urban wealthy and rural poor, could cause unwelcome political problems (and publicity) around the time of the Olympics.

?which brings us back to the current news on Tibet. The Olympic Torch Committee is planning to take the flame to the top of Mt. Everest as part of its journey throughout the world on its way to the opening ceremonies of the Olympics in Beijing in August. Citing security concerns, Beijing has closed off all routes from China to Mount Everest. Tibetan rights groups immediately pounced on this action as further proof of repression.

One thing is certain. Protests will grow dramatically in coming months. And as the Olympic torch shines on China, what the world sees may not be what China wants it to see. And how that, and the potential for unexpected events in Beijing, play into growing global tensions are things will make the late summer of 2008 a potentially very interesting time for China and the world.

..

Mar 7 2008

Islamists, leftists gain as earthquake occurs in Malaysian politics

The coalition that's ruled Malaysia for 5 decades suffered a humiliating defeat in this weekend's elections, losing its supermajority for the first time since 1969 and threatening the rule of Prime Minister Abdullah Ahmad Badawi. Islamists, extending an impressive string of global election victories, scored victories in the northern states of Kedah and Perak and easily maintained their power in Kelantan. A leftist party (Democratic Action Party or DAP) won in Penang, a state hosting numerous high tech and other multinational firms. DAP and PAS in coalition with the People's Justice Party also took control of the industrial state of Selangor and nearly all seats in the Malaysian capital of Kuala Lumpur according to Reuters. The Global Power Barometer (GPB) has long projected growing Islamist power gained not through bombs but votes...with Malaysia as a ripe target. While the upset was the result of economic worries, concern about ethnic division, incompetence and corruption and the Malay-dominated coalition of PM Badawi (Chinese and native Indian populations voted strongly against PM Badawi's National Front) rather than religion, Islamists and leftists deftly used public dissatisfaction to increase their power and turn Malaysian politics on its head. Watch for more fireworks in Malaysia in coming months.

No way out: Lebanon's fate can depend neither on its own political class nor on anyone else

Even before the 1975-1991 Lebanese Civil War, the best way to push forward one's political agenda in Lebanon was to be armed to the teeth and strongly backed politically by the armaments and finances of a strong sponsor. Presently, there is only one Lebanese political group openly armed to the teeth, but ironically, it is just as politically weak as the other Lebanese political groups to enforce its own agenda on the contemporary realities of Lebanon.

In order to project the future of Lebanese stability, one must ask whether there will be future sponsors pushing other Lebanese political groups to start a new civil war? There are no signs for such developments yet. In fact, the Lebanese political realities have changed so much now, that alliances and counter-alliances are being sought across the sectarian and traditionally religious divides. Hence at first glance, it seem unlikely there will be another destructive Lebanese civil war.

But the political stalemate is real: Lebanon is still without a President. Its parliament is shut down. And, its government remains stifled by an opposition that claims it has no legitimacy. Unfortunately, the efforts by Lebanese politicians to resolve the current impasse between the government loyalists and the opposition have actually been as surreal and irremediable as the impasse itself. Some Lebanese politicians have proposed a federal structure for Lebanon, forgetting that a federal structure requires a national consensus to choose the president, the foreign policy, and the budget. No agreement could possibly be reached on any of these issues in Lebanon (and if they could, there would be no need to talk in federal terms). Other politicians are calling for the division of the country; but they are forgetting that Lebanon was created in order to protect the Christians of the East. In fact, the map of Lebanon was drawn according the limits of the furthest Christian villages, a fact that these politicians have seen to forgotten. Even the politicians who want to keep Lebanon united want it only according to their own terms.

All the proposed solutions seem like a luxury and a pointless public relations exercise since, whether the Lebanese politicians realize it or not, the fate of Lebanon is not in the hands of the Lebanese political class, but rather, in the hands of external powers.

For a start, Syria will not facilitate the election of a new president for Lebanon. In fact, it will do nothing to help restore stability to the country as long as it feels the dangers of a possible hostile regime in Beirut that may not comply with its policy objectives. Syria may even conspire against stability as long as the dossier regarding the international tribunal for the murder of late Rafiq al-Hariri remain open and points an accusatory fingers at Syria's possible role in the assassination.

Iran will continue to hamper all efforts to bring stability to Lebanon because it will not relinquish the power, through Hizbullah, of deciding war and peace in the region.

It is against the interest of both Saudi Arabia and Egypt to allow Lebanon to fall under Syrian hegemony, simply because this will represent a major blow for both countries' standing in the region and their prestige in the international community. Further neither Saudi Arabia nor Egypt, are prepared to let Iran have influence in the Arab-Israeli conflict, which for reasons of history, proximity and demographics extends to Lebanon.

As for the US, it cannot compromise with Iran or Syria over Lebanon, so long as the Iranian nuclear programme is still a bone of contention between the two countries, and as Iraq remains mired in conflict.

Consequently, in light of the impotent political leadership within Lebanon as well as all of these opposing interests, it is very hard, if not impossible, to see the future of Lebanon as anything more than a game board for all these actors to play out their opposing hands.

Khairi Janbek, 49, worked as Deputy Director at the Royal Institute for Interfaith Studies in Amman, Jordan. He was Special Advisor at the Jordan Institute of Diplomacy, Press Secretary to the Former Crown Prince of Jordan, and private advisor to Prince Hassan bin Talal of Jordan. He has been a columnist at Jordan's political, economic and cultural weekly, The Star...

Mar 4 2008

Why a new round of Iranian sanctions...what do they mean and what will they accomplish? An interview with Kaveh Afrasiabi:

Global Power Barometer: What are the immediate and mid-term implications of this latest vote of sanctions against Iran? Will they have any concrete effect on Iran or the Iranian people? What will the likely response be from Iranian President Mahmoud Ahmadinejad and the Supreme Leader Ayatollah Ali Khamenei? What is the present relationship like between Russia & Iran and China & Iran? Will Iran remember this vote as a diplomatic betrayal?

Kaveh Afrasiabi: In a certain sense, contrary to the public perception, the new round of Iran sanctions is tougher than the previous ones. By targeting the "dual purpose" goods it in effect introduces a serious impediment to progress in Iran's civilian nuclear program, no doubt depending on the scope of implementation. The sanctions call for the interdiction of suspected goods to and from Iran. This will probably serve first and foremost the purpose of what Tehran refers to as "psychological warfare," even though nested in it is the potential for triggering confrontation between Iran and US forces in the Persian Gulf region. Iran has already gone on record stating its grounds for rejecting the UN demands, which Iran's leaders deem as illegal and unjustified given Iran's cooperation with the IAEA, which has confirmed the resolution of "outstanding questions," the absence of any military diversion, and Iran's de facto, albeit inconsistent, implementation of Additional Protocol. Iran's position will most likely remain constant, although it could be affected in the event of a similar censure by the IAEA Board of Governors meeting in Vienna this week following the UN vote. A partial setback on Iran-IAEA cooperation is to be expected, irrespective of Dr. Mohammad ElBaradei's request from Iran to cooperate "as much as possible." From Tehran's point of view there appears to be a diminishing return for its cooperation, causing a disincentive to cooperate. A potential for crisis spillover into Iraq and the broader region is also a distinct possibility. Today, many Iranians feel dismayed by what they perceive as double standards and political manipulation of both the IAEA and the UN Security Council by a few Western (nuclear armed) powers. So far, Iran's trade with China and Russia has not seriously suffered and Iran certainly hopes that this will remain the case in the future irrespective of Moscow's and Beijing's rather obligatory vote at the UN. The only bright light right now is that Iran's moral and legal argument against sanctions is rather potent and, absent any 'smoking gun', will likely grow even more potent as time goes on and Iran continues the path of perfecting its centrifuges. Time may be on Iran's side.

GPB: Is there a better way to compel Iran to abandon uranium enrichment and plutonium development and accept foreign delivery of nuclear fuel for its civilian nuclear program? Or conversely is there a way for the international community to ever come to terms with Iran's present course?

KA: Given the past history of broken promises and reneged nuclear contracts, as well as Iran's historical aversion toward total foreign dependency on such a sensitive subject, it is hard to compel Iran to abandon what it sees as a legal right enjoyed by other nations, no matter what the foreign hysteria and or allegations. Chances are Iran would de-emphasize or degrade its current quest to master the nuclear fuel cycle if it had unfettered access to it, partly because of other pressing priorities. But at the moment, this has been so enmeshed with the issue of national pride and self-assertiveness that the more pressure is exerted on Iran, the more Iran becomes determined not to compromise let alone abandoning its enrichment program, particularly since Iran's president is on the record with the idea of a regional or international consortium for nuclear fuel production on Iranian territory. This alternative has definite potential worth exploring. It could for example lead to the import of cutting-edge nuclear technology to Iran kept in "black box" as foreseen by some MIT scientists recently.

GPB: Is Iran simply racing against the clock to develop a nuclear weapon before it is stopped? Do you think Iran has heeded the lesson from the North Korean example: that you can get more when you have more with which to negotiate?

KA: I think the North Korea analogy is quite misleading, mainly because it ignores the strategic dissimilarities between the two cases. Unlike North Korea, Iran is not threatened with an unwanted merger or unification. It is not playing a junior role for any bigger power's containment policy, nor is the very idea of a 'nuclear shield' vis-a-vis US power pertinent to North Korea which has fought the US in the past applicable here,given the sizable pool of shared US-Iranian interests with respect to the stability of new Iraq and new Afghanistan. With the 'action-reaction' logic of a nuclear arms race missing (particularly since the demise of Saddam Hussein), it is difficult to agree with the conclusions that a threatened Iran is questing after the nukes or, obversely, with the "ambitious Iran" seeking it for aggressive, or aggrandizing, purposes. Notwithstanding the disinformation-induced stage setting that has gone into the backdrop of the UN's latest move against Iran, we are undoubtedly witnessing a recycling of the 2002-2003 Iraq scenario that was pushed forward with zeal mixed with blind faith by the US media. With no US pundit even bothering to ask if the US (and Israel) have engaged in manufacturing evidence against Iran, adopting the allegations at face value instead, it is clear they have not learnt any lesson from the Iraq fiasco. At the same time, there is a proliferation tendency latent in every civilian nuclear program whose ebbs and flows, that is, the extent of their dormancy or latency, are often conditioned by the changing security environments on a long-term basis. Thus, any serious imbalance in the conventional arms race or, hypothetically speaking, a proliferation move on the part of the Gulf Cooperation Council (GCC) states, may spur that tendency in Iran. Unfortunately, the West is committing a major, dreadful, error by attaching to Iran a manifest tendency that is at best latent, extrapolating coercive policy results from this misperception and, thus, inadvertently pressing Iran in the wrong direction -- by trying to isolate Iran and even threatening it, when it is abundantly clear that these simply have the opposite effect.

Kaveh Afrasiabi is a political scientist who has taught at Tehran University and Boston University and a prolific writer. He is the author of numerous books such as "Iran's Nuclear Program," "After Khomeini: New Directions in Iran's Foreign Policy," and the upcoming "Iran's Foreign Policy Since September 11," in addition to several book chapters on Islam. Afrasiabi is a regular contributor to UN Chronicle, Asia Times, and Iranian Journal of International Affairs. He has been published in many global newspapers and academic journals. He has been a consultant to CBS TV and has made numerous appearances on CNN and other news networks. Afrasiabi has given numerous presentations at international conferences, has worked as a consultant to the United Nations on Dialogue Among Civilizations, and is the founder and director of an NGO, Global Interfaith Peace. He is proficient in English, Farsi, German and Spanish and has done research at UC Berkeley and Harvard University...

Feb 26 2008

Somalia: Who's winning?

With all the goings-on among Israel, Gaza, Iran, Iraq and everything in between, an important but ignored piece of the news is Somalia. Yesterday, at least one US cruise missile was fired at Southern Somalia in an attempt to take out an "al Qaeda leader." According to local sources explosions killed civilians and children. The Pentagon is still trying to figure out if militants were killed.

But that's not the news. The real news is that Islamist militias are again making progress at re-taking Somalia since US bombs and helicopter gunships threw out the Union of Islamists Courts in late 2006. Yesterday's US missile strike was directed at the southern town of Dobley, near the Kenyan border, a town taken over by Islamist forces last week.  February saw an increased number of clashes between Islamist forces and the Ethiopian-backed interim government and stretches of the countryside are controlled again by Islamists. While the world's politicians and pundits are dealing with more exciting stories like the growing war between Israel and the Palestinians in Gaza, the US and Russian elections and Iranian advances in Iraq and elsewhere, the Somalian story is likely to be ignored. But it's an important story because how Somalia goes will affect the entire Horn of Africa. Watch the GPB for the latest on the future of Somalia.



China and the Middle East...A new frontier and a big challenge for the US.

The Global Power Barometer has been tracking for nearly two years the rise of Chinese diplomatic activity in Africa. It began first when countries such as South Africa, Kenya, Zimbabwe and many others switched their diplomatic penchant from Taipei to Beijing after heavy economic incentive packages were offered by China across the continent. Now only five countries in Africa still maintain ties with Taiwan: Burkina Faso, Swaziland, Malawi, The Gambia and Sao Tome and Principe. By 2006 many global analysts had taken significant notice of China's prowess in Africa, observing large Chinese expatriate communities across Africa, in charge of projects such as mining in Zambia, steel plants in Zimbabwe, transportation planning in Namibia and oil exploitation in Sudan. Beijing hosted a massive summit for African leaders in 2007 (with 43 member nations attending) and Chinese President Hu Jintao has visited more African nations than most people in the Bush administration could probably name.

Recently, global thought leaders have been taking note of a new trend: China's growing role in the Middle East. On Sunday, one of China's state news agencies, Xinhua, reported that an Egyptian leader praised Beijing for its positive role in Sudan. This is significant, given the massive international criticism China has been receiving for its blind eye turned toward Khartoum's role in the genocide in Darfur. China, a supplier of arms to Sudan, and with a large stake in Sudanese oil, now comes under fire from international rights organizations especially in light of this year's Olympics to be held in Beijing. Egyptian expert Hani Raslan, head of the Sudan and Nile Basin Studies Program of the Al-Ahram Center for Political & Strategic Studies praised China's role in Sudan, saying: "China provides humanitarian aid, builds water projects, hospitals and schools in Darfur to promote local development and improve people's lives. China doesn't interfere in Sudan's internal affairs. China's investment in Sudan can help improve the expertise of the local people." (For the full story, see China key articles).

Such praise for Beijing has not been in large supply in the Middle East, but key developments have taken place that suggest China's role in the region is increasing. Some pundits have suggested that China is seeking to build a military base in the Middle East, likely in Iran. Given China's lukewarm reception for increased sanctions on Iran given its nuclear program, and considering generally warm relations between Tehran and Beijing, this could be a viable project. It is worth noting, however, that Iran has brushed off any rumors to this effect.

Other examples of China's prowess in the region:

• The China-Arab Cooperation Forum, founded in 2004 and aimed at encouraging bilateral trade between Chinese businesses and Gulf Arab nations.
  
• China's support for Kurdish groups in northern Iraq. Beyond working to cement oil deals in northern Iraq, China, by creating diplomatic and aid leverage with Iraq's Kurds, is able to enhances its control of the separatist Uighur population at home. As Yitzhak Shichor of the Jamestown Foundation explains (see today's China articles), Turkey has been known to support the Turkic-language speaking Uighur people, seeking to create their own nation of Turkestan. China, by threatening to support Kurdish groups and a separatist rebellion in Turkey, is able to prevent Turkish funding from reaching restive populations in or near China.
  
• Rumored connections between Beijing and Hamas. In May of 2006, China announced that it had hosted Palestinian Foreign Minister Mahmud al-Zahar, a leading member of Hamas. Since then, China has remained silent concerning the Palestinian issue, but pundits question just how much China has at stake in the conflict.
  
• In the vacuum left by waning US influence and growing Iranian influence, even Israel has gotten on the bandwagon, sending Prime Minister Olmert last year to Beijing for a key diplomatic exchange aimed at promoting bilateral relations with China.
  
• Finally, and perhaps most importantly, as China's appetite for energy grows, China has been importing more and more oil from the Persian Gulf. Since establishing diplomatic relations with Saudi Arabia in 1990, China has been swift to build embassies throughout the Middle East. Some analysts predict that 70% of China's oil imports will come from the Middle East by 2015. Most recently, China even suggested that it could replace India on the groundbreaking Iranian-Pakistan-India pipeline currently under development.

Feb 19 2008

The Enemy of My Enemy is My Friend...as Alice said through the looking glass

Tensions are continuing to rise all over the Middle East. The Lebanese crisis is coming to a head. Iran has made not-so-veiled threats about using its network of radicals to turn a bad situation even uglier. Yesterday Iranian Revolutionary Guard chief Mohammad Ali Jafari promised the destruction of Israel by the "hands of Hezbollah." The US-backed Anbar Awakening Council in Iraq now looks to have a mixed legacy according to the analysts that know the region best. Pakistan, Afghanistan, Egypt, and even Morocco are seeing a growing presence of jihadist groups.

So, it may be surprising to learn that Gulf Arab states, craving stability, are depending on a highly unlikely ally: Israel.

Sami Alfaraj, adviser to the Kuwaiti government and Gulf Cooperation Council (GCC), and president of the Kuwait Centre for Strategic Studies suggested last week that Gulf Arab nations believe Israel will act against Iran before Iran secures an operational nuclear weapon. "I believe in something on the same Iraqi model...We are assuming in the Gulf that Israel will take [an Iranian nuclear capability] out. We are not saying that, but Israel would. Alfraj said. Just as the Israeli Defense Forces bombed an Iraqi nuclear installation in 1981, government leaders in Kuwait City, Doha, Al-Manama and even Riyadh believe that they would do the same to Iran today before Tehran were to obtain an operating nuclear weapon.

So, Israel is the country Arab states love to hate, but yet are strategically reliant upon for their own security. This paradox is not in any way superficial and relates to far more than the nuclear issue. As Islamist factions grow in political strength and their ability to inflict terror, critical governments in Egypt, Jordan, Syria and Saudi Arabia, will likely rely more on Israel, perhaps even encouraging very quietly (by providing intelligence among other things) Israel's targeted assassinations.

If these politics weren't convoluted enough, this whole warped security scenario works only as long as Israel remains the "enemy". Israel's enemy status allows Arab governments to divert public attention from their own internal problems and allows them to keep radicals at bay even while these governments may be helping Israel limit radical Islam's effectiveness.

When the Bush Administration went into Iraq, it believed getting rid of Saddam would somehow enhance the stability of the region. Not having a clue as to how the modern Middle East works led the Administration to accomplish just the opposite effect and now the goal has become maintaining some semblance of the old status quo...a goal shared by the US, Israel and the Arab governments standing against two common enemies - Iran and radical Islam. That's why the US was able to give US$30 billion of arms to Israel and US$20 billion in arms to Arab States with no real protest from either side. All those arms most likely will be used for the same purpose.

Yes, having new common enemies is a great way to unite, even if covertly, former enemies. But you certainly need a program to tell the players apart (or perhaps a copy of Lewis Carroll's classic "Alice's Adventures in Wonderland and Through the Looking Glass")...

Feb 11 2008

Blackwater and Triple Canopy: They're still doing their thing in Iraq.

After the September 16, 2007 scandal involving the killing of Iraqi civilians in Nisoor Square by heavily armed Blackwater employees, the global media finally brought to attention the use of mercenaries by the Pentagon in Iraq. After many calls for the Pentagon to rid itself of the practice of paying many times what US soldiers make for a shadow army, the reality is that nothing has changed. GPB intern Betsy Isaacson has prepared this observation on two of the principle mercenary groups: Blackwater and Triple Canopy.

Name: Blackwater Worldwide (formerly Blackwater USA)
Headquarters: Moyock, NC
Founders: Erik Prince, former Navy SEAL, and Al Clark, former Navy SEAL and SEAL Trainer.
Mercenaries In Iraq: 987 as of November 2007
Mercenaries Come From: The Navy SEALs, the US Marines, the CIA and the US Army. Non-citizen employees are likely to be from Chile, often former employees of ex-dictator Pinochet's regime.
Origins: Blackwater was founded in 1997 to provide "private training facilities" and "cutting-edge training" to "U. S. and friendly foreign military, law enforcement, commercial, and government organizations."

A Short History: After three years of foraging for civilian business Blackwater's model changed dramatically with the October 2000 bombing of the USS Cole. The Cole caused Blackwater to switch focus, dropping its struggling civilian business to more aggressively pursue federal contracts. The move was successful with Blackwater landing a five-year contract training 50,000 Navy sailors in the use of live firearms. Business remained steady until 2003, when President Bush, under the now-infamous "Mission Accomplished" banner, declared "Major combat operations in Iraq have ended". Blackwater was one of the first groups to jump into the reconstruction-security fray, and in August 2003, they were awarded a $21-million no-bid contract to guard Coalition Provisional Authority head Paul Bremer III. 2004 gave Blackwater its first taste of media exposure, when four Blackwater contractors were killed and hung from a bridge in Fallujah. Though the deaths were avenged - Marines subsequently staged a full-scale invasion of Fallujah - the families of the victims subsequently filed a wrongful-death lawsuit against Blackwater. Since then, Blackwater has weathered numerous PR attacks, and Blackwater employees, as a "muscular wall of men in mirrored sunglasses, bristling with firepower", have become an icon for the private military industry.

Controversies: In addition to the wrongful death lawsuit, which alleges Blackwater sent its contractors into dangerous territory without adequate preparation or military permission, Blackwater has also been accused of scrubbing the record of one employee, Andrew Moonan, who on Christmas Eve 2006 became "visibly drunk" and fatally shot an Iraqi bodyguard of Iraqi Vice President Adel Abdul Mehdi. Additionally, Blackwater has been accused of smuggling weapons into Iraq, evading taxes, and repeatedly impeding a Congressional investigation into the Fallujah incident. Blackwater employees have been accused of participating in multiple homicides (most recently in the September 2007 Nisoor Square shootings), including a number that allegedly have not been reported due to a State-Department-approved practice of paying money to relatives of those killed in order to prevent said relatives from reporting the killings.
Current Plans: Presently, Blackwater is going through a massive rebranding campaign. In October of 2007, Blackwater USA began the process of changing its name to Blackwater Worldwide. In the same month, a re-designed insignia was unveiled replacing the red ?cross-hair?, so prominent in the old logo, with a rectangle design. The company has also revealed plans for two new training facilities, one in California and one in The Philippines.


Name: Triple Canopy
Headquarters: Herndon, VA
Founders: Matt Mann, former Delta Force operative, and Tom Katis, former Green Beret.
Mercenaries In Iraq: 2,000 (estimated)
Mercenaries Come From: The majority of Triple Canopy?s soldiers are third-country nationals, hailing from places like Fiji, El Salvador, Columbia, Chile and Peru. Triple Canopy was recently engulfed in a brief media firestorm when it was revealed that these soldiers are both trained and paid less than their American counterparts, often for the same work (Americans make $400 to $700 dollars a day, whereas a typical third-country national earns about $40 to $150 a week). Triple Canopy?s American contractors come from the regular US Army, as well as US Special Forces, especially Delta Force and the Green Berets.
Origins: Triple Canopy was founded in 2003 by Matt Mann and Tom Katis, who envisioned ?starting a business that might somehow address the threat of terrorism.? The two founders originally planned to ?use their military backgrounds to train government agencies in anti-terrorism techniques?.

A Short History: Tom Katis and Matt Mann started building Triple Canopy in late 2003, quickly filling the ranks with the cream of the army's crop; ex-special forces, mostly former Delta Force operatives and Green Berets. Early in 2004, Triple Canopy began bidding for government contracts with little but a collection of impressive resumes. Given a $90 million six-month renewable contract to guard 13 CPA headquarters in Southern Iraq, the company began scrounging for supplies, plundering piles of captured enemy munitions for workable AK-47's and attaching flat-run tires to a set of recently-purchased armored Mercedes sedans that had previously been rented out to rappers. From such parochial beginnings, Triple Canopy proved its abilities well when in April of 2004 the company found itself in the media spotlight for their defense of the CPA compound in the previously-sleepy Iraqi town of Al-Kut. With 40 Ukrainian troops, Triple Canopy employees defended the compound for 24 hours before being relieved by the US military (after all but two of the local Iraqi guards abandoned the post). Lately, Triple Canopy has been floated as a possible replacement for the more controversial Blackwater in guarding Baghdad's heavily fortified Green Zone.

Controversies: In July 2006, Triple Canopy employee former Marine Jacob C. Washbourne allegedly said to three of his teammates "I want to kill somebody today," and was later reported to have shot into the front of a white civilian truck and into the windshield of an Iraqi-driven taxi. Washbourne's conduct was subsequently reported to Triple Canopy first by Fijian teammate Isireli Naucukidi, and two days later by the man's American teammates, Shane B. Schmidt and Charles L. Sheppard III. Washbourne, Schmidt and Sheppard were all summarily fired; Sheppard and Schmidt subsequently sued Triple Canopy claiming the company fired them for reporting a crime (Triple Canopy denies the charge, claiming they fired them for reporting a crime (Triple Canopy denies the charge, claiming they fired Sheppard and Schmidt for waiting two days to report the crime). Reports have also surfaced about a December 2004 ?possible double homicide of unarmed Iraqi truck drivers?.
Current Plans: Rumors have recently surfaced that Triple Canopy is ?for sale?, though whether that means the company is shopping for private investors or looking to go public is unclear. Some speculation also that Triple Canopy is looking to acquire an air wing, possibly to ?better capitalize on Blackwater?s woes?. Triple Canopy also recently acquired Clayton Consulting, a ?Global Risk and Crisis Management? firm, though Triple Canopy has yet to make significant changes in Clayton?s service offerings and management structure.
..

Feb 5 2008

Iran's Bushehr nuclear plant gets its fuel:

In a move that's fallen very much below the radar of the international media, Russia has over the past two months shipped to Iran all 82 tons of uranium fuel required to start up the Bushehr nuclear power plant. The final shipment was delivered on January 28, 2008. The shipments were announced by Iran's Islamic Republic News Agency (IRNA) and confirmed by Russia's Atomstroiexport, the state company that also built Bushehr for Iran. Iran claims that Bushehr will begin supplying electricity to the national grid during summer of 2008, but Atomstroiexport says that a startup date has not been finalized and that it likely will take till the end of 2008 for the Bushehr to begin producing electricity.

One reason the international media essentially ignored the event is that the shipments were expected, and tacitly accepted by the United States. Although originally opposing Russia's offer to provide Iran with nuclear energy, Washington came around because it had no choice and because Moscow offered to support supposedly stricter United Nations sanctions on Iran's own enrichment activities.

Russia's public rationale was that if it supplied fuel to Iran for a nuclear power plant, then Iran would have no need to develop its own nuclear enrichment program and would halt its home-grown uranium enrichment production and nuclear weapons research. Iran agreed to return used fuel to Russia in order to prevent any plutonium extraction (plutonium is the fuel for bombs). Russia's position was supported by the International Atomic Energy Agency's chief Mohamed ElBaradei when he reported that Iran has, for the most part, cooperated with nuclear inspectors and by the December release of the US National Intelligence Estimate saying that Iran stopped all nuclear weapons programs in 2003.

Yet Iran continues to enrich uranium. The Iranian government's arguments for why it needs nuclear power in the first place relate to its energy infrastructure. Despite the amount of oil in Iran, the history of Iranian production capability and distribution is uneven. This winter's freezing conditions across the region have exacerbated the problem with lack of fuel causing significant brownouts and blackouts particularly in rural areas. Indeed, Roger Stern, a Johns Hopkins economic geographer writing in the Proceedings of the National Academy of Sciences last year (as reported in Foreign Policy Magazine's blog) estimated that Iran's oil industry could completely collapse by 2015 and that Iran's failure to reinvest in its oil infrastructure is resulting in a 10-12 percent annual decline in oil revenue.

Tehran also claims that enrichment is necessary in order to supply other planned nuclear power facilities, such as a 300-megawatt light-water reactor in Darkhovin, and, more importantly, that depending upon foreign suppliers for its nuclear fuel puts it at risk of energy blackmail. Russia of course is no stranger to using energy supplies as a political weapon. Given the current state of relations with the US, Iran would likely consider the US as also an unreliable supplier.

That's led Russia and the West to propose an international nuclear fuel bank available to any country seeking to develop civilian nuclear energy. US billionaire Warren Buffet actually committed to put up US$50 million if the world would add US$100 million to support formation of such a bank. However, at this year's Davos World Economic Forum, Hashemi Samareh, chief advisor to Iranian President Ahmadinejad, said (as the Wall Street Journal reported) that his country could join a proposed international bank for enriched uranium -- but only as a supplier. As quoted by the Journal, Mr. Samarah said, "Having this nuclear-fuel cycle is part of our right. There is no reason -- when we can produce something -- to get it from other people...This doesn't mean we will reject outright proposals from other governments. ...Iran could supply this fuel bank."

So, how could the US or the governments of France of the UK which have also expressed grave concern over Iranian nuclear ambitions, have allowed Moscow, at best a controversial ally, to become the lynchpin for Iran's nuclear ambitions? Besides the obvious reference to the incompetence and lack of vision that have characterized US foreign policy over the past 7 years, an increasing number of analysts are warning of a "New Troika" between Russia, China and Iran. They point to Russian President Putin's visit to Tehran for the Caspian Summit in October as one of many signs that Russian-Iranian relations are warming (despite the distrust Iranians have historically had of Russia).

Another view is that Iranian nuclear development is the result of a deeply flawed Washington anti-proliferation policy that has disavowed or selectively applied international treaties such as the Nuclear Non-Proliferation Treaty (NPT), acquiesced to nuclear energy development in some countries (e.g., India) while trying to stop it in others, negotiated massive new arms deals ($20 billion for Israel, $30 billion for Iran's neighbors) to placate US "allies" fearful of Iran's new power, and generally lost the high ground in the debate. These views suggest that Washington, now seeing its failure, considers Iranian nuclear power as inevitable and so is going along using Russia's actions as cover for another policy blunder. Compounding this, of course, is the loss of influence (and gain in Iranian influence) resulting from the Iraq war.

Whatever the case, the next US President will face a Bush Administration legacy of a nuclear Iran, a greatly enhanced Russian influence in Iran and the region, Arab states seeking to balance Iran by developing their own nuclear energy if not weapons programs and about $50 billion more in conventional weapons distributed throughout the world's most volatile region.

..

Feb 1 2008

Pakistan: The front line in the War on Terror?

Global media reported yesterday that the US had killed Abu Laith al-Libi, reportedly al Qaeda's number 3 and the alleged mastermind of the February 2007 bombing at Bagram Air Base in Afghanistan during a visit by Vice President Dick Cheney. Al-Libi was killed by the US not in Afghanistan but in North Waziristan...in Pakistan.

Pakistan, long thought to be the refuge of Osama bin Laden has become the front line in the War on Terror. US Defense Secretary Robert Gates has said, "I think we are all concerned about the re-establishment of al-Qaeda safe havens in the border area. I think it would be unrealistic to assume that all of the planning that they're doing is focused strictly on Pakistan. So, I think that that is a continuing threat to Europe as well as to [the United States]." (Source: USA Today).

Indeed, the US has pleaded with Pakistan's President Musharraf to allow US special forces into Pakistan to attack al Qaeda strongholds. President Musharraf has said no...a necessary public position in a country that views President Bush rather than bin Laden as the greater terrorist. US counterterrorism officials have said, however, the missile strike, which killed 12, would not have been possible without Pakistani intelligence, and approval of the Musharraf government.

Analysts generally recognize that Pakistan's extremist problem is not a unique set of circumstances in an isolated geographic region. Pakistan's and Afghanistan's extremists are inextricably linked. Moreover, as Afghanistan's extremist crisis grows with new fronts created in the southern, eastern, and northern regions, so it also pours into Pakistan, from the FATA region into the Swat Valley. The extremist movement in the whole region is growing.

And yet wiser minds than those of the American Administration point out that the fractured, diverse and unruly nature of the enemy makes this insurgency ever more difficult to decipher and even more difficult to confront. Islamist insurgents in Pakistan and elsewhere are an unidentifiable force that cannot be easily fought. They are tough to identify, tougher to fight with traditional military tactics and nearly impossible to defeat. Whether they are Afghani Taliban, Pakistani Taliban, Al Qaeda or simply opportunistic common criminals, the success of one empowers another. Likewise the martyrdom of one empowers the others. What perplexes global thought leaders is how best to counter this growing force when the most expedient and available methods of force seem to counter and strengthen the enemy simultaneously.

So how can the US, Pakistan, NATO and UN forces to fight this illusive enemy? Unfortunately, global analysts say that the West and its allies have few and poor options. But here are some of their suggestions:

• Use traditional methods but with better application: US troop strength should increase to over 31,000 in Afghanistan. NATO forces should also be expanded but, more importantly, they need to be battle-hardened and ready to fight.
  
• Despite the allure of capturing bin Laden, the majority of analysts believe sending US troops to Pakistan must be avoided at all costs. Most analysts believe that an American presence would do far more to exacerbate extremism and anti-Americanism, and would further destabilize Pakistan and the region.
  
• Try to get state building right this time around. Analysts propose that a new UN envoy, along with NATO officials, work closely with Afghan local authorities to encourage the creation of new institutions and boost confidence in the Afghan government. One important strategy suggested here would involve willingness to actually listen to the Afghans and Pakistanis. As in Iraq, some extremists can actually be integrated into the political process, particularly if it uses and enhances local social structures rather than attempts to impose Western values. This, of course, requires a competent and more nuanced, subtle policy, something that won't occur until a new US President is inaugurated.
  
• Adopt an effective grassroots communications and trust building strategy that uses the learnings of the US military in Iraq...one that respects tribal structures and splits local supporters away from radical Islamists. They also recommend that the Punjabis and Sinds of the "lowlands" be urged to better engage with the Pushtun and Baluch in the "tribal areas" so as to promote regional solidarity and not extremism.
  
• Promote Nationalism: Analysts suggest that the promotion by the government of Afghan and Pakistani nationalism and allegiance could in fact isolate the jihadist Arabs operating in the area.

Jan 23 2008

Last week the GPB highlighted one of the world's key chokepoints - the Straits of Hormuz, connecting the oil-rich Persian Gulf to the Indian Ocean. The Straits of Hormuz sees about 30% of the worlds oil pass through its narrow waterways, which is the majority of all oil transported to Asia. As Hormuz is administered by Iran and Oman, recent political strife between Tehran and Washington obviously leaves analysts guessing as to the Straits' future and worrying about Iran's potential ransom card to choke off a vital ingredient to the world's economy.

But perhaps even more important to global politics and trade are the Straits of Malacca, thinly sitting between Malaysia and Singapore on the east and Indonesia's Aceh Province in Sumatra on the west and serving as the main connecting shipping route between the Indian and Pacific Oceans. At its narrowest, the Straits span a mere 2.8 km in the Phillips Channel near Singapore. The Straits of Malacca see one quarter of the world's ocean-bound trade each year, with around 50,000 ships per year traveling between East Asia and the Indian Ocean. The Straits are so popular and vital to global trade that ships are designed specifically to fit the waterway with a measurement known as the ''Malaccamax'' - the maximum size a ship's hull can be built to accommodate the Straits at their shallowest point (25 meters deep). Ships larger than this, called ''Post Malaccamax'' are forced to divert their traffic to the Lombok Strait, next to Indonesia's Bali and leading from the Indian Ocean into the Java Sea.

Malacca's Geopolitical Significance