The World in 2012

World in 2012, Syria, Egypt, Russia, China, Euro
Q&A
Summary
After a year that included the Arab Awakening, the euro crisis, Japan’s nuclear catastrophe, the killing of Osama bin Laden, and the unanticipated reaction to Russia’s recent parliamentary elections, there are many unanswered questions left for 2012.
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The change in 2011 was historic. After a year that included the Arab Awakening, the euro crisis, Japan’s nuclear catastrophe, the killing of Osama bin Laden, and the unanticipated reaction to Russia’s recent parliamentary elections, there are many unanswered questions left for 2012.

In a Q&A, Jessica T. Mathews looks back on the last twelve months and previews the year ahead. Mathews says that the theme of 2011 was surprise and rapid change and that this will likely continue in 2012.
 

How will 2011 be remembered?

Without question, 2011 will be remembered for the Arab Awakening, and perhaps—it’s too soon to know for sure—a political awakening in Russia as well.
 
The one story that could compare to the Arab Awakening is the euro crisis. If the eurozone or the European Union comes apart, the events will be comparable in historical significance to what’s happened in the Middle East.

The killing of Osama bin Laden and even Japan’s devastating earthquake and tsunami and subsequent nuclear crisis do not rise to the same historic level. The Fukushima accident put a huge question mark over the likelihood of a nuclear renaissance. Global warming may still turn the world toward nuclear energy as a non-carbon-emitting form of electrical power—it’s too early to say. But it was a huge event for Japan and elsewhere with countries as big as Germany choosing to phase out nuclear plants and others slowing down plans for nuclear growth. The latter is probably a good thing, particularly in China and India, as plans envisioned extremely rapid growth. Slower growth will increase the likelihood of safer development.

2011 turned out to be a huge surprise. Things happened that no one predicted two weeks before they took place. Surprise was the leitmotif of the year and it would be wise for us to expect the unexpected again in 2012.
 

What are the major global issues that will define 2012?

2012 should be another historic year. The first thing to look at is the quartet of issues in the Middle East—Egypt, Iraq, Syria, and Iran.

Elections in Egypt are moving forward; whether the military will give up the power it took on in the wake of Mubarak’s ouster is a huge question mark. The disturbances we have seen in the last several days and weeks are a preview of what could happen after the new parliament is finally elected. The signs are not encouraging.

Within moments after the end of the war in Iraq and the departure of U.S. troops, Prime Minister Nuri Kamal al-Maliki made astonishing moves against Sunni leaders—on the very heels of the last American troops crossing the border. It’s too soon to say whether Iraq is going to unravel, but I wouldn’t be at all surprised if the situation gets much worse.

At this time next year, Bashar al-Assad will be a former president and the present Syrian regime will be gone. But the questions are how it ends, the extent of the violence along the way, and how much life is lost. Will the international community play a constructive role and will the Arab League step up as it did in Libya and prove more effective than it has so far? There are huge consequences for—at the very least—Lebanon, Iran, Israel, and Turkey.

We are entering a particularly dangerous period in Iran. The latest intelligence is that Iran is planning to expand enrichment activities at an underground facility near Qom. Israel is engaged in a debate over whether to attack before such a facility is fully operational. The politics of this for the U.S. administration in an election year are awful. This would be a war that Israel can start but can’t finish. Meanwhile, Republican candidates are trying to outdo each other on bellicosity toward Iran. The United States could be drawn into military action that would cause global oil prices to skyrocket and in all probability lead to an outbreak of Shia terrorism.

Elsewhere, the euro crisis could tip the world into recession. It is still unclear whether the crisis can be resolved and whether the eurozone will survive. 

There is also the continuing question of Afghanistan and Pakistan. Things in Pakistan are going from worse to horrible. Tensions are on the rise between its powerful military and the civilian government, and it is imaginable that a military coup could end yet another era of civilian rule in 2012. And this is all complicated by the war in Afghanistan, which is not going well. In this decade-long war, the two highest years for NATO casualties are 2010 and 2011.

At home, given the so-called supercommittee’s failure to agree on ways to reduce the deficit last summer, there is a real concern about the budget cuts that are supposed to follow.  Sweeping, across-the-board cuts in defense spending, rather than cuts shaped to fit the external, strategic environment, could be terribly damaging.  Yet attempts to wriggle out from under the requirement for automatic cuts in 2013 only underline America’s inability to put its fiscal house in order at a time when many other countries are tackling vastly more difficult problems. The picture of our fractured, gridlocked politics is having a major impact abroad on other countries’ perceptions of U.S. influence and power—and, of course, on the desirability of the U.S. example. This is costly in ways that are hard to pinpoint or quantify but undeniable in impact.

And finally, what will happen in Russia’s upcoming presidential election is now uncertain. The recent parliamentary elections suggest that the new middle class and younger generations in Russia are going to stand up and say “enough.”  In street protests through December, opponents are saying “we want a voice in governance, we insist on being taken seriously, and we don’t want another twelve years of Vladimir Putin.” The old social contract between state and society may no longer be acceptable to a large percentage of the population. If this happens, we don’t know how Putin will respond, and I’m sure he doesn’t either. A dramatic weakening of Putin’s legitimacy, even if he is reelected, can’t help but have major impacts for Russia’s foreign policy.

All of this just scratches the surface of what 2012 will hold for the world.
 

Will the Arab Awakening continue?

Yes, it will. The year 2012 will be a bumpy year, but this is not unexpected. The Arab Spring was a misnomer. It is not a season, or even a yearlong process of change. Rather, 2011 was the beginning of a decade or multi-decade period of profound transformation in the Arab world.

People must think of the Arab Awakening in these terms and not believe that one election in one country is the defining moment from which there is no turning back. All of the hysteria over Islamists coming to power in Egypt is one example of this type of thinking. In fact, democracy will likely be a moderating influence on Islamists over time because governing is so much more demanding than is opposition. The first elections are not the end of the road, but only the beginning.

The year ahead will be a difficult time for the new governments, however, as they will face huge challenges in delivering economic progress. People across the region are demanding economic gains, but it is difficult in the current context to see how governments can deliver.
 

Does the euro crisis threaten global economic growth in 2012? Is the end of the euro near?

It is too often forgotten that the European Union is a larger economic entity than the United States. What happens in Europe has enormous implications for the global economy, but the size of the impact will be determined by how the eurozone changes and whether it suddenly implodes or finds a way to incrementally move toward survival.

Europe seems committed to saving the euro. The problem is that taking the steps necessary to do so requires an enormous degree of political will by each individual government. In order to get political approval at home, leaders need to wait until the economies are teetering on the brink. At every stage, the political process can only be pushed one step ahead when there is no choice but to act. This process keeps repeating itself.

The problem with this is that it means that the cost of saving the euro keeps going up. Europeans can’t get ahead of the markets. If leaders had been able to do eight months ago what they did in December, it would have been enough to gain the markets’ confidence and stop the downward spiral. But it wasn’t possible politically. Having the global economy’s toes over the edge of the abyss is not a comfortable way to go forward.

Unfortunately, it’s hard to see any alternative. The terrible connection between politics and economics will continue as the necessary economic steps are impossible to sell at home if the economy isn’t on the brink.

So far, there has been a strong determination to preserve the euro, but one wonders when exhaustion will set in. Moreover, the markets won’t let this dance continue forever. For better or worse, the situation will be resolved in the next year. The recovery, however, will take many years.
 

How will the U.S. presidential election shape America’s foreign policy?

There are three areas where politics will most obviously impinge on policy. The first is China. The United States has a long history in which the party out of power—whether Democratic or Republican—hammers the party in power for being too nice to China.

This year will be no exception. China will undergo a leadership transition of its own. There will be an election in Taiwan, and if the current government there, which has favored rapprochement with Beijing, is replaced, there is a chance that tensions could rapidly rise across the Taiwan Strait, destabilizing the region. Regardless of how this plays out, the U.S. administration will hear loud demands to be tough on China in ways it wouldn’t otherwise do. Indeed, President Obama’s recent talk of the U.S. “pivot” toward Asia is likely a preemptive move against just such attacks.

The next issue is Israel. President Obama will be under a great deal of pressure to prove that he loves Israel as much as the Republicans, at the same time that Israel’s current government is, to be polite, not exactly a constructive force for peace. With the building of settlements continuing and the constant drumbeat in Israel to take action against Iran, this issue could pose a major challenge to the American administration.

The third area that could be a major focus of the campaign is a contest to see who can sound the toughest on Iran. The truth is that the world may ultimately need to live with an Iran that has the capability to make nuclear weapons—a so-called “screwdriver’s turn away.” If the Iranians are smart, this will be their goal.

The biggest threat from an Iranian nuclear weapon is not that Iran’s rulers are lunatics who will start a nuclear war, but that it will set off a nuclear arms race in one of the most dangerous regions in the world and where governments have the money to pay for it.

It is enormously important that the United States does all that it can to prevent this from happening. The Obama administration has tried hard without success. The president’s outstretched hand was spurned by Tehran. However, sanctions are having an effect and diplomacy to get Russia and China to cooperate in this respect is plodding ahead. We can’t forget, however, that if the Assad regime falls in Syria, Iran will lose its most important ally. Governments that are weakened abroad often make moves at home to prove their mettle and distract their people from the loss.
 

Will China’s leadership transition affect its global outlook? What does it mean for the balance of power in Asia?

While this is a generational change of leadership in China, we are most likely to see continuity of policy. But there are still many questions about China even under its current leaders.

Particularly, there is uncertainty over how aggressive and nationalistic China will be in asserting its territorial claims, most notably in the South China Sea. China took aggressive steps in 2010 but seemed to recognize the lack of wisdom in those actions and backed off significantly this year. Beijing will also have to manage the leadership transition in North Korea, which is always a time when that insecure, dangerous country is most difficult to deal with.

At the same time, China faces economic questions of its own. Beijing will need to boost household spending, but this poses all kinds of strains at home for a new generation of leaders. While China will wrestle with the resulting problems and economic growth will slow significantly, I don’t see this as likely to become a crisis.
 

What does the U.S. exit mean for Iraq and the region? How does the end of the Iraq war influence American power in the Middle East?

When an authoritarian leader is removed—whether by revolution or external force—a power vacuum is left behind. It is nearly always filled by factions fighting over the distribution of power, and I’ve previously warned that the presence of the American occupation in Iraq delayed this struggle but was unlikely to ultimately prevent it from occurring.

The end of the nine-year war in Iraq gives the United States the chance to leave some of the responsibility behind. But what this means in concrete terms depends entirely on what happens in Iraqi politics. If sectarian strife rises, there will be an entirely new set of problems on everyone’s hands, particularly if Iranian influence grows.

The Iraqi government needs to stay committed to the agreed-upon distribution of power between Shia, Sunnis, and Kurds. If it does, there is hope. It is too early to say how this will play out, but one has to say that al-Maliki’s choosing to accuse his vice president of treason within hours of the U.S. departure is anything but encouraging.
 

How will the international community address growing fears about Iran’s nuclear ambitions?

Intelligence suggests that the Iranians are planning to expand enrichment cascades in an underground facility near Qom. The United States has apparently told Tehran that this is a redline that shouldn’t be crossed.

The Israelis are seemingly champing at the bit, saying that this is an existential and unacceptable threat and that they will need to act before the facility is up and running. If Israel acts first alone, the United States will undoubtedly be sucked in and share all of the blame with Israel, but enjoy none of the positive political boost at home that it would have had if it had taken the lead.

The worry is that politics will nudge the U.S. administration into taking a catastrophic action. The first thing that would happen would be a huge increase in oil prices. With a fragile global economy this could be terrible. There would also be Shia terrorism, as Iran has been preparing for this scenario to play out for years and will activate terrorist cells. In the end, I believe the United States would deeply regret a military escalation.
 

What does 2012 hold for the war in Afghanistan and stability in Pakistan?

The U.S. military says that it is winning the war in Afghanistan, but I don’t see any signs of this—quite the opposite actually. There is an enormous mountain to climb to meet the withdrawal deadline in 2014 and leave behind a stable country not under the thumb of the Taliban.

The defining issue in Afghanistan is the U.S. withdrawal date. On the one hand, it’s easy to say that it was unwise to set a date, but on the other hand, there is the impatience of the American public to put an end to this very long conflict and a legitimate question of whether another ten or twenty years of fighting in that country could really make things better.

Nonetheless, the deadline is looming. There are few indications that NATO and Afghanistan can build security forces capable of keeping the country whole and protected from a Taliban resurgence. The government, weak and rife with corruption, and Afghan forces will require much more funding than Afghanistan itself can afford. This makes them a ward of the international community for the indefinite future—no one has focused on this reality yet but obviously it isn’t a healthy outcome.

At the same time, the situation in Pakistan is only getting worse and the country is high on the list of worries for 2012. There are indications that there is a renewed move against the civilian leaders by the military. Every civilian government in Pakistan’s history has been deposed through military action and the country’s economy is in a horrible state.

The U.S.-Pakistan relationship is at a particularly low ebb. Washington will need to rethink its relationship with Islamabad. Up until now, the way the United States has spent its money in Pakistan has unintentionally encouraged Pakistan to overspend on the military and allowed it to be obsessed with India in a self-destructive manner. The United States has always shaped its policies toward Pakistan with another larger goal in mind—in this case, Afghanistan. With very few options that look promising, Washington needs to find a way to more constructively affect the course of events.
 

How significant is Kim Jong Il’s death in North Korea?

Since Kim Jong Il’s death there has been much silly punditry spinning worst-case scenarios about what comes next in North Korea. This is neither a moment of crisis nor a great opportunity to reunite the two Koreas.

The most likely outcome is that there will be a long period of mourning followed by an uneasy period of transition when Kim Jong Eun tries to consolidate power. The legitimate worry is that the new leaders will try to prove their toughness by conducting missile tests or otherwise provocative behavior. Ultimately, I believe, the third generation of Kims will rule, but this will probably be the last generation of this dynasty.
 

Is 2012 another lost year in the global fight against climate change?

Yes, I think so. Very little will happen this year. The United States is the problem, and with the presidential election in November there will not be movement in Congress. China is more ready to act, but it has a bigger challenge. India will wait for the United States and China. And Russia, a major, underappreciated contributor to carbon emissions, is far from being ready to take positive action.

The science is terrifying. We need fast global action in the next five years if the planet is to stay at a safe temperature. There is no reason to be optimistic that major action will begin on the needed scale without a major climate disturbance to propel countries to act.

We are in a waiting game given climate denial in the United States. I don’t believe this denial actually has anything to do with doubts about the science. It is ideological and economic: people know that it will take major government action and leadership to deal with climate and that the present winners and losers in the economy will be different.

The United States needs to act for there to be global progress, and in the end we will have to price carbon. As soon as carbon is priced, change will follow. We will eventually take action, but the questions are how long it will take, how much it will cost, and how much irreversible damage will be done to the planet. One thing is certain: the longer we wait the more painful it will be.
 

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Source http://carnegieendowment.org/2011/12/29/world-in-2012/8ria

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