2008: The Year of Weakness and Confusion

Date: 01-01-2008 | Category: Articles, Middle East

2008: The Year of Weakness and Confusion

01-01-2008
2008: The Year of Weakness and Confusion
 
The West is facing an unprecedented year of weakness and confusion in the coming 2008. In the United States, 2008 is the year of choice. Presidential election campaign will be polarizing. Luckily, the two contenders will emerge by late spring due to massive early primaries, yet the US will not be focused on foreign policy at least until 2009, when the key appointments in the next Administration start taking place. Yet, Middle East topics will be driving US security and economic concerns next year.
 
American foreign policy, suffering from a number of setbacks, will further deteriorate in 2008 as principal decision makers of the Bush Administration take their leave.
 
Already confused over the Iran National Intelligence Estimate, which declared that Iran froze the nuclear weapons program in 2003, Washington will be groping for a new Iran policy. This choice will be constrained by the clash between Vice President Richard Cheney’s confrontational approach, and a search for a negotiated solution spearheaded by the State Department and the intelligence community.
 
The Iran policy will have a direct influence on the US goal of deploying ballistic missile defense in Poland. Most likely, these plans will be frozen, as Russia rattles its sabers, and the US expands its intelligence investigations. The US outreach to Iran may paradoxically hasten the end of President Mahmoud Ahmadinejad, much hated by the fellow mullahs, but it may also strengthen his position, which says that defiance in the face of the US and the West pays off.
 
As a part of the complicated diplomatic dance, Iran may allow the US to save face in Iraq. However, the withdrawal of US troops after a rather successful surge in Iraq, domestically necessary for the Republican electoral success, may be premature. It may leave too many Al Qaeda in Iraq cells in place, who may stage a come-back. Such early pull-out may again bring extremist Sunni-led violence to the streets of the much-suffering Iraqi cities and put an even stronger question mark over US overall Iraq venture.
 
A heavy question mark may also rise over the Arab-Israel peace process, kicked off in Annapolis. The negotiations are likely to sputter. Chances are the weak Israeli Prime Minister Ehud Olmert will be abandoned by his coalition partners who are deeply uncomfortable with his promises of deep withdrawals and dividing Jerusalem, and the new Israeli elections just kick the can down the road to 2009 and beyond. There is just no Palestinian commitment yet to recognize Israel and end the conflict once and for all.
 
The weakness of his Palestinian partner Mahmoud Abbas and the implacability of Hamas in Gaza may contribute to the difficulty in finding the solution in what I termed “the graveyard of diplomacy” – the Arab-Israeli conflict. On top of that, there is always a threat of a terrorist attack derailing the negotiations or even taking out one of the key participants.
 
In Egypt and Saudi Arabia, the elderly leaders, sober and rational, are still at the whim of biology. Or gerontology. The death of either President Hosni Mubarak or King Abdullah I may throw their countries in turmoil despite the heirs who happen to be close blood relatives.
 
While chances are good that transitions in both countries will be relatively smooth, “it is the Middle East”. Translate: anything can happen, from street violence to a full-scale uprising. With the United States concentrated on elections and economic woes, fragile regimes may crack.
 
And speaking of fragile regimes, Pakistan will be facing one of the most difficult years since independence, as the January 2008 parliamentary elections may leave its discontents. If less than free and fair, -- which is likely -- President Pervez Musharraf will be further deligitimized, while the Islamists may strengthen. There is only so much the Pakistani state, corrupt and inefficient, can take.
 
In Europe, popularity of the three top leaders, Gordon Brown, Nicholas Sarkozi, and Angela Merkel is declining. In Japan, the “gray man” Prime Minister Yasuo Fukuda, son of a past Liberal Democrat Prime Minister, taking over, has no vision and plummeting popularity.
 
US economic problems will remain connected to the Middle East as well as to the Far East. High oil prices and the trade imbalance with China and other countries, combined with profligate spending by the Congress, make the dollar weaker. Oil exporters are increasingly prefer Euros and might even develop markets in other currencies. Russia, for example, is dreaming of a ruble-denominated oil exchange.
 
US will continue grappling with the aftermath of the sub-prime mortgage crisis – with unpredictable consequences for the stock market and US economy and for the world’s economic health at large.
 
Today, US economy is chugging along, with 4.7 percent unemployment and a significant rise in productivity. Yet, the national debt is over $7 trillion, the trade and budget deficits are burdensome, and a massive credit crunch may cause an economic downturn that will reverberate around the world. A global slowdown then will be likely, with catastrophic consequences for the Republicans in the November 2008 elections.
 
Thus, China should be interested in keeping US economy, its main market, afloat, and making sure nothing happens until the Olympic Games in summer. After that, all bets are off. We do not know how China’s ruling Politburo will respond to the Taiwan’s independence referendum, scheduled for May of next year. A strong US reaction against such an event is aimed to placate Beijing and forestall a military intervention amidst the US election campaign, say in September-October, when President Bush is literally packing his belongings from the White House.
 
China, India and Russia will increasingly define the global economy and emerging markets in 2008. China’s spectacular growth leads to runaway oil and other commodities prices, and results in the greatest redistribution of wealth of our time. Yet the Chinese stock market bubble may be a bigger trigger of the global recession than even the sub-prime mortgage credit crunch.
 
China is going to overtake the US as the energy consumer by 2015. The Middle Eastern oil exporters are already sending one half of their energy exports to Asia.
 
However, if oil is too expensive, other energy sources, such as nuclear and coal will predominate. China is already building coal fired power stations at the rate of one a week, and has embarked on an ambitious program to build 100-200 nuclear power stations. India is not far behind, though its political system is less stable, and its nuclear-armed Pakistani neighbor much more unpredictable.
 
Russia may be hit with some minor turbulence as Captain Putin rearranges chairs on his ship. If he steps on wrong toes, a backlash is possible, though not very likely. A stronger Russia is a challenge for everybody: its European neighbors, who dependent on its gas, to the US, who wants to have Russia as partner but cannot stand Putin’s cockiness and swagger, and to its former colonies in the “near abroad” who will need to tread carefully… or else. Mikheil Saakashvili of Georgia, who is facing his nation in presidential elections in January, knows that well, or at least should know.
 
Thus, in 2008, weakness and confusion prevail. Russia, China and Iran, aided by Venezuela, will continue challenging the United States on the international scene, while Middle East countries and Europe are wringing their hands.
 
Not an enviable position to be in.
 
Ariel Cohen, Ph.D, is Senior Research Fellow at the Heritage Foundation

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