Reflections on the last decade

As 2009 draws to a close, and we prepare to welcome another decade, here are some reflections on the first 10 years of this century – from a global and regional perspective:

• US: There can be no doubt that the past decade, dominated by the administration of George W. Bush, was a bad one for the US. Bush inherited a country at peace, with economic expansion and a budget surplus, and left it mired in two wars, heavily in debt and in the midst of the worst recession in more than 30 years. Internationally, Bush managed to squander an unprecedented reservoir of goodwill and sympathy following the September 11^th attacks by initiating and mismanaging 2 wars; one of which was an unjustifiable outright aggression that the US and the rest of the world will be paying off for decades. The Bush ‘doctrine’ of achieving security by spreading freedom achieved neither. In short, the Bush Administration was a historical blemish that instigated what many observers consider the beginning of the end of America’s golden age. As a result, cognizantly or not, Americans elected Bush’s antithesis by race, background and intellect. Barack Obama’s election would be a hopeful sign that America can self-correct, were it not for the Sarah Palin phenomenon. With the rise of China and India, and amid corporate scandals, massive defaults and a weaker economy, the decade ends with American leadership diminished. While the US remains the world’s superpower, the next decade will surely be a more competitive one for the US, economically and politically.

• EU: After spending much of the decade adding members, expanding its borders, and building its institutions, the European Union seems to be coalescing, though much remains before Europe emerges as a single rival to the US, or even China. Europe continued to struggle with an ageing population, rising immigration and restive ethnic and religious communities that are poorly assimilated and under-represented. As a result, several member countries have been leaning right in their elections, amid rising xenophobia. As the largest single market in the world, the EU will continue to wield significant economic influence, but will remain a follower to US leadership on global issues, as foreign policy continues to be driven more by member states rather than Brussels.

• India & China: The last decade has seen the emergence of India & China as two new global giants, albeit with radically different economic and political systems. Both countries have managed to sustain high growth rates throughout the decade, while moving their economies from sources of low-cost manufacturing and services to centers of innovation and R&D. India emerges as a global technology powerhouse that is also developing other strategic industries. And China is very close to overtaking Japan as the 2^nd largest economy in the world and the US’ largest foreign creditor. With economic power comes political and military power. China, in particular, is already becoming more assertive politically and is set to play a larger role in global affairs. One thing is for sure; the coming decades will see the end of US hegemony and the transition (again) to a multi-polar world, which will be consequential to the rest of the world, and the Middle East, in particular. The rise of India and China is a certainty, which will have an impact on the world’s economy, energy, environment and politics.

Regionally, in the broader Middle East, the decade saw significant changes to the strategic landscape of the region, as a result of the above:

• Iran: Widely assumed to be on the verge of becoming a nuclear power, Iran has already become a regional superpower. Over the past decade, even as it was surrounded by the US, Iran managed to consolidate its influence in the broader Middle East through a strategic relationship with Syria, and support for Hamas, Hezbollah and others, and by taking advantage of the US quagmire in Iraq. However, in spite of extending its strategic reach, the country’s biggest challenges lie ahead: Most pressing is the need to find a solution to the standoff with the West over its nuclear program. Domestically, Iran must deal with a young and growing population that seems increasingly out of step with the direction of its government. The youth is more interested in jobs and opportunities than in ideological slogans. Strategic achievements aside, Iran ends the decade on a weak note as the post-election violence has shaken the system from within, though it’s unlikely to pose any serious challenge to its long-term stability.

• Syria: With the death of an iconic figure, President Hafez Assad in 2000, Syria began the decade with a new leadership. While holding firm to his father’s core political strategy, the young President has been taking the young country through a careful process of transformation and reform that is slow but deliberate. Despite being the target of a US effort to destabilize and undermine it, with hard-nosed determination and flexible diplomacy, Syria has been able to steer through the minefield and emerge a regional winner, holding key cards in Lebanon, Palestine and Iraq. The country has been carefully opening up, economically and diplomatically. Syria’s major challenges remain ahead, with a fast-growing population in need of jobs, an education system that is in desperate need of reform and an old-world economy that needs to be leapfrogged to the next generation. Though recovery of the Golan through a regional peace deal remains an elusive strategic objective, development, energy and water may pose more pressing strategic priorities.

• Lebanon: It was a busy decade for Lebanon. The country was liberated from Israeli occupation in 2000, and saw the departure of Syrian troops in 2005. Hezbollah has matured from a militia with political representation to a sophisticated political organization with a military arm that is more powerful than ever. Due to immigration, demographic changes and the result of the civil war, the Lebanese have long outgrown their sectarian political system, but the country remains too fragile and fractious to explore an alternative that balances proper representation with adequate privileges and protection to its many minorities. The country continues to struggle with mounting debt, internal security and most importantly, national identity. Given its internal divisions and the propensity of its leaders to solicit foreign support for domestic political advantage, Lebanon will remain a battleground for regional power players.

• Iraq: In short, a critical country that served as the Arab counter-weight to Persian Iran was devastated by the US invasion, creating a huge void that remains to be filled. In a decade, the country went from an active regional player (though contained through sanctions) to a playground for regional players and a haven for religious extremists. As a result of the US invasion, Iraq sustained irreparable damage to its infrastructure, institutions, culture, sovereignty and social fabric. It will take generations before Iraq finds its equilibrium again. And given its religious composition (Sunni-Shiite) and ethnic mix (Arab-Kurdish), Iraq represents a microcosm of the regional fault lines. It remains to be seen whether Iraq remains intact and what regional role it will play, if any.

• Palestinian Territories: The Palestinian tragedy continued with no end in sight. With the death of Yasser Arafat in 2004, a new era began that is more difficult than the one before, leaving Palestinians more divided than ever, between those supporting the Palestinian Authority and those in favor of the elected Islamic Hamas. The ‘peace process’ is virtually dead, and the Palestinian dream of statehood seems more distant than at the beginning of the decade. And, as Israel continues to build settlements in the West Bank, the future state continues to shrink. The most major issue facing the Palestinians is the lack of respectable leadership that is representative of an accomplished, highly-educated Palestinian population both at home and in the diaspora.

• Israel: It is difficult to argue that the last decade was a good one for Israel. After 60 years of military dominance, Israel suffered serious setbacks beginning with the 2000 withdrawal from Lebanon under military pressure from Hezbollah, and ending with a failed war against Gaza in 2008 that brought international condemnation (Goldstone Report). In the interim, Israel was militarily bruised in its 2006 war with Hezbollah. More importantly, the military deterrent that Israel enjoyed for so long has dissipated. The strategic relationship with Turkey is less so, and the relationship with the US is not as strong as it was under Bush. Iranian threats notwithstanding, there is no longer an existential threat to Israel but serious strategic threats remain. Those include demographic trends that will soon leave Israel facing a choice between being a democracy and retaining its Jewish character, and a steady erosion in support for Israel globally. The coming decade could be an opportune time for Israel to clinch a regional deal at favorable terms that will ensure its long-term survival and integration in the region. Otherwise, both micro and macro factors will make the region a more difficult environment for Israel in the next decade.

• Turkey: The last decade saw drastic changes in the Turkish political landscape that have major regional, and possibly, global implications. Most significantly, the monopoly on power by the hardline Kemalist secular establishment has been broken, with the rise of the mildly Islamist Justice and Development Party. Domestically, major improvements were made in Turkey’s relationship with its Kurdish population though discontent remains, while the tension has increased with the country’s traditional secular establishment. Just as dramatically, after decades of being spurned by Europe, Turkey finally turned East, and seems expanding its sphere influence at the expense of previous allies such as the US and Israel. It remains to be seen whether Turkey’s future governments continue with the new direction or make a U-turn back to the West.

• Egypt: Egypt’s regional stature has steadily diminished, and the country ends the decade less relevant than at its beginning. Given its size and history, Egypt continues to punch below its weight. Both Turkey and Iran, the two other regional powers of similar size, are more pivotal, including in Arab affairs. While the country struggles with profound problems, the overriding concern is to ensure a smooth post-Mubarak transition; presumably to Mubarak Jr. This erosion in Egypt’s role is likely to continue, and even magnify, as the country’s next leadership takes control and addresses the monumental challenges of managing development, controlling the rising popularity of the Muslim Brotherhood and providing opportunities to its fast-growing population.

• Saudi Arabia: The strategic relationship with the US and the surplus from the high price of oil for much of the past decade continued to enable the Kingdom to play a regional role that is beyond its natural credentials. With the ascent of King Abdullah, minor reforms were set in motion, but remain glacially slow in pace, and far short of the challenges facing the country. After overcoming the discord within the next generation of royals over succession, the king must deal with a young and growing population of unemployed and frustrated youth, a disenfranchised Shiite community, and a conflicted population that has been radicalized by über-conservative Wahhabi teachings, but yearns for modernity. For now, the American and global thirst for oil will keep the money flowing in and the veil on.

• Pakistan: After emerging as an unlikely nuclear power at the end of the last decade, Pakistan continued a steady descend into chaos and dysfunction. With the suspension of democracy, the killing and exile of its leaders, and the Taliban and Qaeda secure in remote areas away from government control, the country’s threats are more domestic than external. Today, Pakistan is likely the most dangerous frontier in the fight against extremist terrorist organizations.

Otherwise, a few key phenomena, trends and innovations in the last decade changed our very lifestyles.

• Technology: More people are wired and even more are wireless. The words ‘Apple’ and ‘BlackBerry’ don’t invoke images of fruit as they do addictive technological wonders that connect us to the world. The collusion of available broadband, faster processors, cheap memory and advanced multimedia has shifted the consumption of news and entertainment from traditional computers and televisions to mobile devices. Social media and networking are changing the nature of social interactions and hastening the pace of life. More than ever, we live in fast forward mode in which life happens at web speed.

• Terrorism: The attacks of September 11, 2001 continue to haunt the world, and terrorism has become an overriding global concern during the last decade. Al-Qaeda has morphed from a classic organization with established members and bases in Afghanistan and a few other countries, to a more dangerous, invisible, decentralized, ideological umbrella group operating globally and spawning numerous smaller local cells all over the world. In the past decade, Islam has been hijacked by a fringe of extremist adherents who have done more damage to it than any external enemy could have done. What remains baffling is the inefficacy of the proposed solutions, and the stubborn refusal of the West to recognize that this evil phenomenon does not have a security solution. Though law enforcement and security measures are necessary, the solution ultimately lies in depriving these groups of their best recruiting tool: a just cause.

• Globalization: With the advent of technology and the growth of business, the world is more closely integrated than ever before, and the chain reaction that can be sparked by any seemingly-random event cannot be estimated. Economically, the collapse of the derivatives markets (credit default swaps and MBS) and the credit crisis impacted real estate and capital markets across the world. And politically, with the hyper-viral power of social media such as Twitter, Facebook, and others, information censorship has become virtually impossible as events in any corner of the world can now be transmitted to the global traditional and online media in real time.

• Disparity & Polarization: Increasingly, there is a disparity between the have’s and the have-not’s. This applies not just to the North-South divide, but also within most societies. In the US, the decade ends with a wider economic disparity than ever; the same applies in the developing world, though some exceptions stand out (India). The social consequences of such trends are difficult to predict.

• Energy & Environment: While no alternative energy source has become mainstream, awareness of the environmental cause has. However, with the rapid development of China and India, the fight for traditional energy resources will only intensify, particularly in the Middle East, Africa and, to a lesser extent, Latin America.

As the Latin proverb goes: Dum spiro, spero. In English, as long as I breathe, I hope.

Peace to those who seek it. Happy New Year.

Hariri in Syria: Reconciliation and Opportunity

Much has been made about Saad Hariri’s visit to Damascus. Far from the drama that some media had built it up to be, the visit itself turned out to be somewhat anti-climactic.

After 5 years of waging a campaign of personal accusations and political attacks against Syria, President Assad extended an exceptionally warm welcome to Prime Minister Hariri, signaling a willingness to start a new chapter in Lebanese-Syrian relations. Whether the relationship, which has been mired in deep mistrust for so long, actually improves depends, in large part, on Hariri himself.

For Hariri, the visit was a political requisite for many reasons that can be summarized in two:

First, as Prime Minister of a national unity government with the support of the Lebanese Parliament, Hariri is no longer the leader of a Sunni political party, but the official representative of all Lebanese, half of whom do not share his heretofore-adversarial approach to Syria.

Secondly, and more importantly, under the Lebanese constitution, the Prime Minister is effectively the Chief Executive responsible for governing the country and delivering on the people’s agenda. After the Doha agreement and the arduous process of forming his own government, Hariri understood well that, Saudi sponsorship notwithstanding, he needs Damascus’ blessing and support to govern effectively in Beirut. Without such support, his premiership could turn into a grinding series of political battles over minutiae that will prevent him from achieving anything but stasis. The Siniora government of the last few years serves as a dim example.

To secure Damascus’ support, Hariri will have to commit to some core values that are key to Syria: Re-affirming Lebanon’s Arab identity, securing an unambiguous position vis-à-vis the conflict with Israel, supporting the resistance (i.e. Hezbollah) and committing to a distinguished relationship with Syria. From Syria’s perspective, all other issues may be negotiated.

On the Syrian side, after a period of critical evaluation of its pre-2005 management of the ‘Lebanese portfolio’, there seems to be a genuine interest, among the leadership in Damascus, in adopting a new, more institutional approach to managing the relationship with Lebanon, which could present an opportunity for Hariri.

Personally and politically, the visit represented a difficult climb-down for Saad Hariri. However, the visit could serve as the beginning of a personal reconciliation between Hariri and Assad, and consequently, of a political reconciliation between Syria and Lebanon’s Sunni community. Most importantly, harvested well, the visit could be a harbinger for a new type of a relationship between the two countries.

Regardless of how things play out, one thing was clear: After the acrimony of the last 5 years, in form and substance, Hariri’s visit to Damascus symbolized the return of Syria’s preeminence in Lebanon.

The Political Price of Dubai's Bailout

Abu Dhabi announced on Monday that it will lend Dubai $10 Billion to bail it out of its current debt crisis. According to the FT, Abu Dhabi was left with little choice. I agree.

In general, most of the coverage about Dubai’s financial troubles has focused on the economic/business side (real estate bubble, credit drying up, etc.) and ignored the political component, which provides some of the broader context. Within the UAE, Dubai has enjoyed a high degree of autonomy in its foreign policy. In particular, Dubai has developed a very close relationship with Iran over the years, and serves as a major business, investment and trading outpost of Iran’s with the outside world, which makes the US, Saudi and even Abu Dhabi uncomfortable. As negotiations between the West and Iran over their nuclear program head toward a dead-end (and tougher sanctions, possibly), the US and its clients (Saudi Arabia, Abu Dhabi, etc) are tightening the noose on Iran. In my opinion, the combination of extensive media coverage and Abu Dhabi's silence as the clock ticked toward default, over the past few weeks, was to exact maximum political concessions out of Dubai - regarding its foreign policy autonomy in general, and regarding Iran, specifically.

My prediction is that relations between Iran and Dubai will cool down in the future. That, I think, is part of the political price that was paid by Dubai in exchange for the $10B bailout from Abu Dhabi.

Swiss Minaret Ban - Paradoxes

Here are a few paradoxical observations regarding Switzerland’s recent ban on erecting mosque minarets:

• The majority of the Swiss who voted for the ban on minarets came from cantons that had the fewest Muslims and no mosques. Basel City, the canton with the largest Muslim community, and home to half of all Swiss Muslims, rejected the ban.

• The Anti-ban camp was led and organized by non-Muslim Swiss, whereas the Muslim communities in Switzerland and the wider Muslim world were largely silent and ineffective.

• Virtually all Christian churches and Jewish religious organizations opposed the minaret ban, including the Catholic, Protestant, Evangelical, Lutheran and Orthodox Churches, in addition to several Jewish organizations.

• The minaret ban was approved in the country that had the most moderate and best-integrated Muslim community in Europe. In contrast to France or the UK, Switzerland was neither targeted by extremist Islamic organizations nor suffered from internal strife in relation to its Muslim community.

• Switzerland, which promotes itself as beacon of neutrality and civility and a global champion of human rights, and home to the Office of the High Commissioner for Human Rights, instituted a xenophobic ban against the symbol of one major religion, in violation of the Universal Declaration of Human Rights.

These necessitate serious introspection – both by the Swiss, as well as by the Muslim communities of Switzerland and the wider Muslim world.

Obama's No-Win Strategy in Afghanistan

President Obama’s speech on Afghanistan was driven more by politics at home than reality on the ground in Afghanistan. He sought to satisfy left and right, and received criticism from both.

Obama identified the enemy as Al-Qaeda and the Taliban. First, it is widely acknowledged that Al-Qaeda is better established and more dangerous in Pakistan than in Afghanistan, and its miniscule numbers in Afghanistan (just over 100 members, per estimates) certainly don’t warrant an additional 30K troops, over the 108K US and NATO troops already there.

As for the Taliban, the Administration has already hinted, directly and through its minions (Karzai government), that it’s willing to negotiate. In addition to their religious fervor, the Taliban have been winning in Afghanistan mainly because they operate in an environment where people have few jobs, even less hope and absolutely nothing to lose. The US can't defeat those with 30K more troops when they’ve been losing with over 100K.

If Obama really wanted a viable Afghan solution, it would have been by adopting the very strategy that both Democrats and Republicans are united in opposing: serious nation building, which requires difficult, long-term commitments. But, given their economic challenges and political realities, Americans have neither the resources nor the appetite for that.

Obama was in a no-win situation, and he chose a no-win strategy. Instead, he should have adopted the classically-American approach: Cut the losses, declare victory and pull out.

Syria, Has it won?

An article from the latest issue of The Economist: Syria, Has it won?

The case for skepticism on Obama’s Middle East policy

Beyond the stream of upbeat statements from Washington, and the early-term speech in Cairo and televised address to Iran, the initial optimism that President Obama would deliver a significant change to the turbulent Middle East is steadily eroding, giving way to skepticism and disappointment, if not outright pessimism. After 11 months in the Oval Office, beyond the eloquent speeches and numbing oratory, developments on the ground do not provide for a very encouraging picture. In fact, the picture looks rather bleak across the various flash points of the Middle East.

In Iraq, President Obama seems keen to deliver on his promise to withdraw US troops from Iraq by 2010. However, the situation there remains tenuous at best, and all indications are that Iraq will be left in shambles, with a shattered economy, fractious society, violated sovereignty and compromised security. After a period of relative calm in the center of the country, suicide bombers are, again, striking at government buildings and random civilians. The death toll is starting to climb back up, while a shockingly inept, sectarian government seems incapable of protecting its citizens, providing jobs and services, and managing diplomacy. The Kurds, meanwhile, are moving forward with a constitution that effectively makes them sovereign from the rest of Iraq. And, in the complex fight for regional dominance, the major players are increasingly using Iraq to settle scores and gain strategic leverage against their regional rivals, with Iran the clear winner to date. In short, as President Obama prepares for exiting the Iraqi theater, the situation after the upcoming US withdrawal does not bode well for the country.

On the Palestinian side, the situation is as dire as ever. The US, and its regional clients (Egypt, Jordan and Saudi Arabia) remain unwilling to acknowledge the results of the 2006 Palestinian elections that brought the hardline Islamic Hamas to power, and continue to prop up the popularly-discredited and morally-bankrupt Palestinian Authority. As a result, the Palestinian people have never been more divided, with the PA barely holding on to power in the West Bank, and its rival Hamas in control in Gaza. More recently, on the heels of the debacle of President Mahmoud Abbas’ withdrawal of the PA’s support for the Goldstone report last September, his ultimate disgrace came from his own Israeli and American allies, by the former’s provocative refusal to freeze settlements in the occupied territories, and the latter’s acquiescence. After Israel’s embarrassing rebuff of President Obama’s public position demanding a settlement freeze, Obama backed down, accepting Israel’s demand that negotiations continue without pre-conditions, and bestowing accolades upon Netanyahu, leaving Mahmound Abbas weakened and exposed. Paradoxically, the Palestinians’ standard of living is the worst it has been in over a decade, and they seem farther from statehood now than at any time since the beginning of the George W Bush presidency in 2000.

On Iran, President Obama’s early address to Iran’s people and leadership and open invitation to dialogue was a welcome first step. Many were hopeful that the new Administration was about to usher in a period of US-Iranian détente, whose impact would be felt across the wider Middle East. To date, beyond the speech, we have seen neither gestures nor diplomacy to justify such hope. Rather, following the contested Presidential elections in June, we saw the normally-careful President Obama succumbing to political pressure by abandoning his cautious approach to dealing with the post-election violence, in favor of the standard-issue, non-effective statements, taking sides in an election that should be the dominion of Iranians only. And, while there were some indications of progress in the negotiations over Iran’s nuclear program, it’s very unlikely to produce any breakthroughs. After all, with Iran’s growing regional clout and political advances all over the chess map, from Iraq to Lebanon, Gaza and more recently, Yemen, there is nothing compelling the Iranians to back down. Meanwhile, there is increasingly alarming bellicose language from the Administration that is more reminiscent of the previous administration’s positions than those we expected to hear from a fresh Obama approach.

On Syria, after much talk about renewed engagement and some hopeful early signs that included sending Senator Mitchell for several rounds of discussions with Syria’s leadership, and the appointment of a yet-unnamed ambassador to Damascus, nothing substantive has been accomplished. The snail’s pace, tactical and equivocal approach to dialogue with Syria has been disappointing. The Obama Administration seems to be more interested in ensuring an orderly withdrawal out of Iraq than in true engagement with Syria on the broader regional issues. In addition, the US, under Obama, has shown no interest in taking an active role in renewing the stalled indirect ‘peace’ negotiations that Turkey has been sponsoring between Syria and Israel, in the midst of a consistent chorus of statements by Israeli officials declaring that Israel would not withdraw from the Golan Heights, in essence turning Israel’s back on peace with Syria. An Israeli commitment to a full withdrawal from the occupied Golan is an absolute requisite for a peace treaty with Syria, and hence for amelioration in the security situation in the region. No such peace is possible without active US sponsorship for the process.

There is a clear pattern that has been developing over the past 11 months: Eloquent speeches followed by shy but encouraging signs of a new approach, invoking opposition by entrenched interests, causing a quick retreat back to the business-as-usual old policies of previous administrations. There is a glaring lack of leadership on display, perhaps driven by the President’s political reality at home. In light of his looming domestic battles from healthcare to the economy, it is questionable how much political capital Obama is willing to spend on his Middle East agenda. Regardless, President Obama himself has set the bar rather high, and with it, our expectations. His quick retreats have cast doubt on his commitment and ability to deliver – if not the sincerity of his early declarations.