Naypyidaw, Burma: a military parade on Armed Forces Day, 27th March. “If change doesn’t come from above, it will come from below”
The year 2011 delivered a series of strategic surprises. From the onset of the Arab Spring, which toppled familiar dictators, to the eviction of European leaders who were victims of financial crisis, sudden change was the order of the day. In 2012 we can expect more managed transitions, but also fast-paced shifts in global influence. Many of the world’s most powerful nations—the United States, China, Russia, France, to name a few—face a potential change of leadership. Global financial markets are still in turmoil, as are parts of the Middle East, while new governments are yet to take shape in north Africa. Europe is rewriting the rules by which it runs itself.
Some of the changes are all but foregone conclusions: Vladimir Putin, the Russian prime minister, will win the presidential election in March and Xi Jinping will succeed Hu Jintao as general secretary of the Chinese Communist Party. But even if we could predict who will triumph in every formal political contest, this would offer only a partial view of who will hold sway in 2012. Most striking will be the continued rise of smaller centres of power, which can quickly shape diplomatic agendas with entrepreneurial flair. Striking, also, will be the capacity of the apparently weak to determine the course of events, and to command the attention and money of the strong. Power is certainly widely distributed; leadership is in short supply.
Armchair strategists love to debate the shifts in the balance of power by invoking broad geopolitical trends. Is the US in terminal decline? Can India’s growth continue at this rate? How would an Iranian nuclear weapon change the Middle East; will Brazil be a true extra-continental power; how soon will Europe bury itself in debt and internal quarrels? Will more “failed states” emerge in Africa to provide safe havens for terrorists?
Yet governments, with more immediate concerns, often tell us a great deal by their approach to those they fear or admire without knowing it. German politicians do not fear another state but the fixed income markets that have impertinently forced Germany to commit more money to save the euro. Egyptian generals have no present fear of Israel, but the protestors in Tahrir Square are another matter. For two years until December 2011, Lebanon proudly sat on the powerful United Nations security council, but never voted against Syria because, even under siege, Damascus controlled much of the political power in Beirut. Morocco takes Lebanon’s seat from January 2012 and so will help shift the balance of power within the council against Syria.
Mexico, Colombia, Peru and Chile, as Latin America’s “Pacific powers,” now co-operate economically, because they all believe that Pacific-Asia is the main economic growth area, and they know that acting together they can form a bloc to rival big brother Brazil. Venezuela’s Hugo Chávez still wields enormous power at home, but with failing fellow travellers Cuba and Iran as principal allies, he cannot claim any serious prestige internationally. President Goodluck Jonathan in Nigeria has ordered the biggest military deployment since the 1967-70 civil war to ten Nigerian states to confront the challenge from Islamic terrorist group Boko Haram, who draw their growing membership from marginalised youth. Nigeria is spoken of as a great power in Africa, but faces so many disparate challenges at home; it is hard to see how it can impress outside.
In short, global power is constantly in flux. It would be wrong now to take military power as a good approximation of it. Three years of financial crises have reminded us of how important economic vitality is to strategic power. Its loss limits a state’s diplomatic reach, tightens military budgets, constrains public support and removes an instrument of influence. Countries can bind other states into closer association through trade and investment—as the EU has done to its east, and China to its south. Well-crafted financial assistance, like that of Qatar to groups in Libya, or indeed China in Africa generally, can more directly buy loyalty. But economic power cannot guarantee strategic strength. People get angry when governments do not produce economic security; yet they can get equally so if they are presumed to live by bread alone.
Last year was the year of “people power” in the Middle East, but east Asia too was affected. Perhaps most surprisingly, one of the region’s premium economies suffered shock political therapy. In the Singaporean elections on 7th May, the ruling PAP won—but by the lowest margin ever, as voters pushed for political modernisation. The electoral message was clear: countries cannot be run like companies for profit, and governments need to treat people as political individuals, not just willing beneficiaries of the state machinery. Other Asian countries adapted in different ways to growing people power: Thailand elected a non-establishment leader who represents the rural poor rather than the urban elite, and Malaysia is doing away with the hated Internal Security Act. Almost every Asian government is becoming more attuned to public opinion, even if it thinks it can manipulate public perceptions. The reforms initiated from above by the military junta in Burma are largely inspired by the appreciation that, otherwise, change may come from below.
We live in an age when power is executed as much by financial and economic strength, by diplomatic and public policy, as by the exercise or threat of military power. But we also live in an age of privatised power. Financial markets, NGOs, companies and opinion-formers shape the environment in which states act—indeed, it is hopelessly out of date to describe the balance of power in terms of states.
Russian and Chinese leaders like to speak of a multipolar world, a term which implies they hold a clearly defined proportion of power. Yet this is a 20th-century phrase and concept. We live in a “non-polar” world with many competing agencies of influence and persuasion. Our century has a neo-Darwinian flavour: not so much “survival of the fittest,” as “power to the most agile.” It is speed, rather than heft, that can determine diplomatic and even military victories, confer financial advantage and even decide the fates of political regimes. No surprise, then, that some smaller powers—archetypically today’s Qatar—can run circles around the more established players.
The key to influence in today’s world lies in balancing the different types of power that are in constant interaction with each other: military, economic, market, diplomatic, reputational, ideas and people power. In 2012, those who do this most effectively will be able to shape the international agenda and force others to act. Those who cannot will be subject to the intent of others, and need to submit.
***
In Europe, the perilous finances of the peripheral countries and the disputes between France and Germany about how to resolve the eurozone crisis have crippled the continent’s foreign policy, and weakened its international influence. Europe in 2012 will be consumed first by creating closer fiscal alignment, even union, between the 17 eurozone countries, and second by agreeing new terms of operation between those 17 and the ten outside the currency bloc. Even if the eurozone makes peace within itself, it will struggle to formulate internal market rules that do not impinge on the prerogatives that the non-euro ten, especially Britain, feel that they have a right to retain. [See “Cameron’s euro dilemma,” by Peter Mandelson, Prospect December.] That task, of constitutional magnitude, will sap all of Europe’s energies and limit the appetite for any “eastern policy,” or new approach to Russia.
As Germany becomes the unrivalled power within Europe, it needs to remain alert to the pressures on Russia where, in March, a managed transition of the leadership will take place. The presidential elections look likely to demonstrate another form of “people power,” with more citizens willing to challenge Putin’s pre-fabricated political process. Putin will still win, but the contest could throw up all sorts of surprises. In the parliamentary elections of early December, widely seen as a test of his personal popularity, the ruling United Russia party lost 15 percentage points of its share of the vote—despite allegations of vote rigging.
Putin is unlikely to come back to the presidency in reformist clothes. He remains hostage to his own legacy, and the reforms that the new middle class of Russia might welcome would also unravel the system Putin created, and from which he still benefits. The talk will be of modernisation; but it will produce pleasing quotes rather than a more liberal order. Putin’s need to concentrate on more complex domestic politics will see him lean towards a truce with the west, and try to position the country more profitably in Asia. While there will be less grandstanding on the global stage, the internal theatre will absorb him greatly. At a time when a form of real politics has a chance slowly to develop in Russia, perhaps it is just as well that no one will be able to accuse a self-absorbed Europe of seeking to manipulate a more democratic dispensation.
Worryingly, there is little sign of any coherent European policy towards its “near abroad” of north Africa and the Middle East. In the UN vote in November on admitting Palestine to the UN agency Unesco, the three big European powers were split: France voted yes, Britain abstained, and Germany said no. A common EU policy on Arab-Israeli matters, and therefore real influence, appears unlikely. Moreover, during this period of austerity, European voters will be more sceptical of using economic “soft power”—financial assistance, improved market access or relaxing immigration laws—to help Tunisia, Egypt and Libya emerge better from their revolutions. So the EU may well be only a bit player in the new Middle East—even if, individually, Britain and France make stabs at influencing events on the ground.
The timing of this could not be worse, given the need to deal carefully with the politics thrown up by the Islamic parties that largely won power in the 2011 elections in Tunisia, Morocco and Egypt. These parties tend to be fiscally conservative, want to reduce subsidies and believe charity is a personal duty, not a role of the state. Yet the Arab uprisings were partly about higher salaries, more public sector employment and increased social welfare. If the types of populist economic policies that so slowed Latin American growth in the 1980s are to be avoided—or limited—the IMF and other actors will need to provide robust financial support with minimal conditionality. The less Europe engages constructively with the new powers to its southern shores, the more problems they will cause in the longer term.
***
For its part, the United States will be consumed by its own economic travails, dysfunctional relations between the executive and Congress [see Cullen Murphy in this month's issue] and the all-too-real reality show of its presidential elections. Assertion of its power abroad will be reserved for very special causes. In the Middle East, the US will celebrate reformers and criticise the retrograde. The agenda, however, will be set by those in the region. Qatar and the United Arab Emirates (UAE) led the Arab League against Libya and then against Syria. Saudi Arabia and the UAE want a firm front against Iran, whose nuclear programme they fear. They worry that the US has lost its vocation, post-Iraq and Afghanistan, for maintaining the balance of power in their favour. Many of the richer Gulf Arab states have to spend their oil surpluses to keep potentially unruly subjects content. Most of the newly-created state jobs announced by rulers this year are going to the security sector, which helps keep the same people in order. The leadership in Saudi Arabia has a long-term task to find proper occupation for its growing youthful population; tiny neighbouring Bahrain needs a political and social accommodation with its majority Shia population. Qatar, alone in having a tiny population and huge wealth, is able to spend much on financing a regional diplomacy to its taste. Others, including the US, will have difficulty controlling the agenda in the Middle East, let alone dictating it.
The balance of power in the Levant, once the Syrian regime falls, will be hugely different. Turkey will seek to take advantage of the new scene, Iran to limit the damage of losing its principal ally. That struggle could in part be played out in Iraq. It is an irony of today’s world that, with the Saudi leadership ageing and the Egyptians consumed by their revolution, two large countries laying claim to future power and influence in the Arab world are non-Arab Turkey and Iran. Of these, Turkey offers the far more appealing model. Iran, hugely divided internally, no longer serves as a great inspiration to others. Its diplomatic isolation will in time become at least as important as the economic impact of sanctions.
All this said, the economic interests of the United States, and the concerns of its regional partners about China’s rise, have made Asia the primary security concern for Washington—far ahead of the Middle East. America’s Asian allies are concerned that the weak financial and economic condition of the US will reduce American influence in the Asia-Pacific, and lead to a proportionate rise in China’s clout. The Obama administration has sought to reassure them that, in the phrase of Defence Secretary Leon Panetta, no cuts made at the Pentagon will come at the expense of Asia. The US says it is working towards “shared prosperity” through the negotiation of the trade and economic liberalisation deal called the Trans-Pacific Partnership (TPP). This would bring together the US and eight other Pacific Rim countries: Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. Japan, Canada and Mexico may join as the negotiations continue in 2012. But everyone sees the strategic accent in this claim. China immediately read these negotiations as a challenge to its own plan to lead east Asian economic integration, which it seeks to do by expanding its free trade agreement with Asean, the Association of Southeast Asian nations, to include South Korea, Japan and other regional states.
As the US negotiates the TPP, it has also announced a strengthened military engagement with Australia and will send 2,500 marines to be stationed in Darwin, just to the south of Indonesia, the largest southeast Asian country. Australia’s interest in that deployment, and the quiet acceptance of it by other Asian states, shows how countries in Asia feel the need to balance their economic engagement with China with their continued, even increased, strategic partnership with the United States. Australia is alarmed, like others, by China’s rising defence spending and the strategy it is developing to deny access in the surrounding seas. At the November 2011 east Asia summit in Bali, nearly every country raised concerns about China’s assertive stand on its claims to the energy-rich South China Sea. Indeed, disputes between China and other claimants in the sea are the cause of the 19th century-style gunboat diplomacy now becoming so prevalent in the region. Even a diminished US is sought by its allies as a Pacific policeman.
In 2011, China perhaps overplayed its hand in defending its national interests, and seeking to advance its economic and political ambitions in every direction. The decision by President Thein Sein of Burma in September 2011 to cancel the £2.3bn Myitsone dam project promoted by China Power Investment Corporation indicated frustration with Chinese business and economic power in the region. The Burmese regime was sensitive to popular opposition to the dam construction, its environmental hazards, and the fact that much of the resultant electricity would flow to China. Its rejection of the plan demonstrated the limits of China’s capacity to make uninterrupted advances into regional economies. It was also, crucially, a sign of the reluctance of neighbouring states to accept the political influence that investments of this type are meant to buy. Just as China has had to adjust its methods of investment in Africa, where its earlier tendency to import all-Chinese labour for infrastructure projects caused a backlash, so will it need to tread more softly in an Asian region that is simultaneously excited by China’s economic power and intimidated by it.
As a rising great power, China’s challenge will be to inspire less regional concern. When its new leadership becomes established, regional confidence building should be a high priority. The more China asserts a preference for a Monroe Doctrine—rejecting the role of “outside powers” in regional affairs—the more it will inspire other Asian countries to hang on to America’s coat-tails, and for the US to claim residency.
What’s of China’s economy? While there are justifiable concerns about Chinese housing bubbles, its banking system and the sustainability of its growth model, the sheer weight of China’s economic power has become systemically crucial. Just as Saudi Arabia is the world’s “swing” oil producer, the US is still the world’s swing geopolitical power, and China the world’s swing geo-economic player. The continued rise in its fortunes, or a temporary slump, is bound to have global impact. Its growing purchase of US debt gives it power, it can demand that companies transfer technological knowhow as a condition for granting access to its market, and it can control its exchange rate to stifle competition. But whether it will ever try to use its financial power to compel the US to limit its military engagement in the Asia-Pacific, or to take wider global advantage, is less certain. China is still above all a cautious power, and on global governance issues it has shown more diffidence than arrogance.
So far, China’s global economic influence has not brought an equivalent geopolitical role. Indeed, China, India, Brazil and other “rising powers” have not yet developed the strategic culture to support truly global foreign policies. Speed, a major element of contemporary power, is not their strong suit. As the Arab Spring evolved, these three countries found themselves behind the curve. China voted against the UN security council on sanctions against Syria, and India and Brazil abstained, even as the Arab League itself, not known for its diplomatic sprightliness, was suspending Syria’s membership of its club. Most Arab states are surprised by the slowness with which Asian and Latin American powers perceived and understood the changes in the Middle East. In late 2010, Brazil, with Turkey, tried to outflank the UN security council in mediating with Iran on its nuclear programme, only to be rebuffed by other council members including Russia. Many saw this effort as a poorly prepared diplomatic vanity project and, since then, Brazil in particular has been more reticent to design grand strategic initiatives.
The rise of these countries makes the world more egalitarian, not subject to a new global sovereign. As the west suffers from a form of strategic arthritis and exhaustion, these new powers still show signs of strategic growth pains and indecision.
***
With Europe introspective, the US occupied with elections and economic repair, and China, India and other rising powers unable to take the initiative beyond their regions, whose actions will shape the international agenda? The answer is that the weak, the fragile and the collapsing will invite and force responses to their plight; the strong and the established will be unable to resist. Often, the power exerted by the weak is most significant—and today it draws dramatic reactions from the strong.
In 2011, after Europe promised Athens conditional financial assistance, it was alarmed by Greeks refusing gifts; the Gulf States were agitated by Yemen threatening to collapse; the US by Pakistan’s possible disintegration and increased militancy. Weakness is a great fundraising device: suggesting imminent or perpetual crisis is a splendid way to obtain financial or other favours. Expect more of this technique in the coming year. In 2012, China will continue to be so worried about North Korean refugees that it will want to prop up the regime. Western states will still direct a great deal of their intelligence activity at groups operating from ungoverned spaces. As the countries of Latin America push forward with modernisation, they will have to keep one eye alert to the demands of their weak indigenous populations, not yet benefiting from growth.
The past year has forcefully impressed upon governments across the world the need for accelerated reform in order to keep hold of power, or at least maintain control over how power may one day be shared with the opposition. Ideas and ideology still count; the “freedom” placards carried by protestors in the Middle East or, at another extreme, the stridently nationalist messages distributed by Chinese bloggers on the internet, shape and limit what otherwise powerful leaders can do. Reputation, too, is a great enhancer of force in international affairs, which is why “honourable exits” from Iraq and Afghanistan are so important for a United States that at least wishes to maintain its prestige, even as other elements of its power wane.
In 2012, after the dramas of the past year, most state power will be directed at managing the still-fragile global economy and mitigating the effects of things that go wrong. But we might also need to prepare for things that could go right. Political risk analysis does not focus enough on change that is good: strategists missed the collapse of the Soviet Union and the potential of the Arab Spring because they are, by nature, even more pessimistic than economists. Will 2012 bring a two-state solution in the Middle East, a secular republic of Iran, a unified Korean peninsula, a democratic Cuba or a free and liberal Zimbabwe? The odds are against. Yet in a world where power is more plural, there are many possible sources of change, both positive and negative.
Those interested in power, in the public or private sector, need to be ready to take advantage of good news, not just prepare for the bad. As no state, alliance or region has the full array of powers at their disposal; as the Rubik’s Cube of global power is not permanently aligned in anyone’s favour; the imaginative and the speedy have the edge. When no one is in charge, the world can feel as dangerous as when it is subject to the whims of a single power. Who will take the lead, at any given time, is anyone’s guess. For the US and its western allies, “regional solutions to regional problems” has long been the liberal rallying cry. Now, in more straightened times, it is a central objective of foreign policy, if only to limit liabilities. Yet few regions, including Europe, can take care of all their problems alone, and none can feel safe just managing the status quo. Weak regions have a way of drawing in reluctant outside support and assistance. Readiness is all. Power will flow to those who can cope with surprise and shocks, and will be drained from those who resist change, rather than shape it. In 2012, nominally weak people in badly-governed countries still have a chance to force reform; small states with clever leaders can cut a dash on the diplomatic stage; big states will not be able to shirk responsibilities. Power will be exercised primarily defensively, and the long-term leadership many call for will be largely absent. We must hope that the well-intentioned keep up the pace against the more malevolent.
The year 2011 delivered a series of strategic surprises. From the onset of the Arab Spring, which toppled familiar dictators, to the eviction of European leaders who were victims of financial crisis, sudden change was the order of the day. In 2012 we can expect more managed transitions, but also fast-paced shifts in global influence. Many of the world’s most powerful nations—the United States, China, Russia, France, to name a few—face a potential change of leadership. Global financial markets are still in turmoil, as are parts of the Middle East, while new governments are yet to take shape in north Africa. Europe is rewriting the rules by which it runs itself.
Some of the changes are all but foregone conclusions: Vladimir Putin, the Russian prime minister, will win the presidential election in March and Xi Jinping will succeed Hu Jintao as general secretary of the Chinese Communist Party. But even if we could predict who will triumph in every formal political contest, this would offer only a partial view of who will hold sway in 2012. Most striking will be the continued rise of smaller centres of power, which can quickly shape diplomatic agendas with entrepreneurial flair. Striking, also, will be the capacity of the apparently weak to determine the course of events, and to command the attention and money of the strong. Power is certainly widely distributed; leadership is in short supply.
Armchair strategists love to debate the shifts in the balance of power by invoking broad geopolitical trends. Is the US in terminal decline? Can India’s growth continue at this rate? How would an Iranian nuclear weapon change the Middle East; will Brazil be a true extra-continental power; how soon will Europe bury itself in debt and internal quarrels? Will more “failed states” emerge in Africa to provide safe havens for terrorists?
Yet governments, with more immediate concerns, often tell us a great deal by their approach to those they fear or admire without knowing it. German politicians do not fear another state but the fixed income markets that have impertinently forced Germany to commit more money to save the euro. Egyptian generals have no present fear of Israel, but the protestors in Tahrir Square are another matter. For two years until December 2011, Lebanon proudly sat on the powerful United Nations security council, but never voted against Syria because, even under siege, Damascus controlled much of the political power in Beirut. Morocco takes Lebanon’s seat from January 2012 and so will help shift the balance of power within the council against Syria.
Mexico, Colombia, Peru and Chile, as Latin America’s “Pacific powers,” now co-operate economically, because they all believe that Pacific-Asia is the main economic growth area, and they know that acting together they can form a bloc to rival big brother Brazil. Venezuela’s Hugo Chávez still wields enormous power at home, but with failing fellow travellers Cuba and Iran as principal allies, he cannot claim any serious prestige internationally. President Goodluck Jonathan in Nigeria has ordered the biggest military deployment since the 1967-70 civil war to ten Nigerian states to confront the challenge from Islamic terrorist group Boko Haram, who draw their growing membership from marginalised youth. Nigeria is spoken of as a great power in Africa, but faces so many disparate challenges at home; it is hard to see how it can impress outside.
In short, global power is constantly in flux. It would be wrong now to take military power as a good approximation of it. Three years of financial crises have reminded us of how important economic vitality is to strategic power. Its loss limits a state’s diplomatic reach, tightens military budgets, constrains public support and removes an instrument of influence. Countries can bind other states into closer association through trade and investment—as the EU has done to its east, and China to its south. Well-crafted financial assistance, like that of Qatar to groups in Libya, or indeed China in Africa generally, can more directly buy loyalty. But economic power cannot guarantee strategic strength. People get angry when governments do not produce economic security; yet they can get equally so if they are presumed to live by bread alone.
Last year was the year of “people power” in the Middle East, but east Asia too was affected. Perhaps most surprisingly, one of the region’s premium economies suffered shock political therapy. In the Singaporean elections on 7th May, the ruling PAP won—but by the lowest margin ever, as voters pushed for political modernisation. The electoral message was clear: countries cannot be run like companies for profit, and governments need to treat people as political individuals, not just willing beneficiaries of the state machinery. Other Asian countries adapted in different ways to growing people power: Thailand elected a non-establishment leader who represents the rural poor rather than the urban elite, and Malaysia is doing away with the hated Internal Security Act. Almost every Asian government is becoming more attuned to public opinion, even if it thinks it can manipulate public perceptions. The reforms initiated from above by the military junta in Burma are largely inspired by the appreciation that, otherwise, change may come from below.
We live in an age when power is executed as much by financial and economic strength, by diplomatic and public policy, as by the exercise or threat of military power. But we also live in an age of privatised power. Financial markets, NGOs, companies and opinion-formers shape the environment in which states act—indeed, it is hopelessly out of date to describe the balance of power in terms of states.
Russian and Chinese leaders like to speak of a multipolar world, a term which implies they hold a clearly defined proportion of power. Yet this is a 20th-century phrase and concept. We live in a “non-polar” world with many competing agencies of influence and persuasion. Our century has a neo-Darwinian flavour: not so much “survival of the fittest,” as “power to the most agile.” It is speed, rather than heft, that can determine diplomatic and even military victories, confer financial advantage and even decide the fates of political regimes. No surprise, then, that some smaller powers—archetypically today’s Qatar—can run circles around the more established players.
The key to influence in today’s world lies in balancing the different types of power that are in constant interaction with each other: military, economic, market, diplomatic, reputational, ideas and people power. In 2012, those who do this most effectively will be able to shape the international agenda and force others to act. Those who cannot will be subject to the intent of others, and need to submit.
***
In Europe, the perilous finances of the peripheral countries and the disputes between France and Germany about how to resolve the eurozone crisis have crippled the continent’s foreign policy, and weakened its international influence. Europe in 2012 will be consumed first by creating closer fiscal alignment, even union, between the 17 eurozone countries, and second by agreeing new terms of operation between those 17 and the ten outside the currency bloc. Even if the eurozone makes peace within itself, it will struggle to formulate internal market rules that do not impinge on the prerogatives that the non-euro ten, especially Britain, feel that they have a right to retain. [See “Cameron’s euro dilemma,” by Peter Mandelson, Prospect December.] That task, of constitutional magnitude, will sap all of Europe’s energies and limit the appetite for any “eastern policy,” or new approach to Russia.
As Germany becomes the unrivalled power within Europe, it needs to remain alert to the pressures on Russia where, in March, a managed transition of the leadership will take place. The presidential elections look likely to demonstrate another form of “people power,” with more citizens willing to challenge Putin’s pre-fabricated political process. Putin will still win, but the contest could throw up all sorts of surprises. In the parliamentary elections of early December, widely seen as a test of his personal popularity, the ruling United Russia party lost 15 percentage points of its share of the vote—despite allegations of vote rigging.
Putin is unlikely to come back to the presidency in reformist clothes. He remains hostage to his own legacy, and the reforms that the new middle class of Russia might welcome would also unravel the system Putin created, and from which he still benefits. The talk will be of modernisation; but it will produce pleasing quotes rather than a more liberal order. Putin’s need to concentrate on more complex domestic politics will see him lean towards a truce with the west, and try to position the country more profitably in Asia. While there will be less grandstanding on the global stage, the internal theatre will absorb him greatly. At a time when a form of real politics has a chance slowly to develop in Russia, perhaps it is just as well that no one will be able to accuse a self-absorbed Europe of seeking to manipulate a more democratic dispensation.
Worryingly, there is little sign of any coherent European policy towards its “near abroad” of north Africa and the Middle East. In the UN vote in November on admitting Palestine to the UN agency Unesco, the three big European powers were split: France voted yes, Britain abstained, and Germany said no. A common EU policy on Arab-Israeli matters, and therefore real influence, appears unlikely. Moreover, during this period of austerity, European voters will be more sceptical of using economic “soft power”—financial assistance, improved market access or relaxing immigration laws—to help Tunisia, Egypt and Libya emerge better from their revolutions. So the EU may well be only a bit player in the new Middle East—even if, individually, Britain and France make stabs at influencing events on the ground.
The timing of this could not be worse, given the need to deal carefully with the politics thrown up by the Islamic parties that largely won power in the 2011 elections in Tunisia, Morocco and Egypt. These parties tend to be fiscally conservative, want to reduce subsidies and believe charity is a personal duty, not a role of the state. Yet the Arab uprisings were partly about higher salaries, more public sector employment and increased social welfare. If the types of populist economic policies that so slowed Latin American growth in the 1980s are to be avoided—or limited—the IMF and other actors will need to provide robust financial support with minimal conditionality. The less Europe engages constructively with the new powers to its southern shores, the more problems they will cause in the longer term.
***
For its part, the United States will be consumed by its own economic travails, dysfunctional relations between the executive and Congress [see Cullen Murphy in this month's issue] and the all-too-real reality show of its presidential elections. Assertion of its power abroad will be reserved for very special causes. In the Middle East, the US will celebrate reformers and criticise the retrograde. The agenda, however, will be set by those in the region. Qatar and the United Arab Emirates (UAE) led the Arab League against Libya and then against Syria. Saudi Arabia and the UAE want a firm front against Iran, whose nuclear programme they fear. They worry that the US has lost its vocation, post-Iraq and Afghanistan, for maintaining the balance of power in their favour. Many of the richer Gulf Arab states have to spend their oil surpluses to keep potentially unruly subjects content. Most of the newly-created state jobs announced by rulers this year are going to the security sector, which helps keep the same people in order. The leadership in Saudi Arabia has a long-term task to find proper occupation for its growing youthful population; tiny neighbouring Bahrain needs a political and social accommodation with its majority Shia population. Qatar, alone in having a tiny population and huge wealth, is able to spend much on financing a regional diplomacy to its taste. Others, including the US, will have difficulty controlling the agenda in the Middle East, let alone dictating it.
The balance of power in the Levant, once the Syrian regime falls, will be hugely different. Turkey will seek to take advantage of the new scene, Iran to limit the damage of losing its principal ally. That struggle could in part be played out in Iraq. It is an irony of today’s world that, with the Saudi leadership ageing and the Egyptians consumed by their revolution, two large countries laying claim to future power and influence in the Arab world are non-Arab Turkey and Iran. Of these, Turkey offers the far more appealing model. Iran, hugely divided internally, no longer serves as a great inspiration to others. Its diplomatic isolation will in time become at least as important as the economic impact of sanctions.
All this said, the economic interests of the United States, and the concerns of its regional partners about China’s rise, have made Asia the primary security concern for Washington—far ahead of the Middle East. America’s Asian allies are concerned that the weak financial and economic condition of the US will reduce American influence in the Asia-Pacific, and lead to a proportionate rise in China’s clout. The Obama administration has sought to reassure them that, in the phrase of Defence Secretary Leon Panetta, no cuts made at the Pentagon will come at the expense of Asia. The US says it is working towards “shared prosperity” through the negotiation of the trade and economic liberalisation deal called the Trans-Pacific Partnership (TPP). This would bring together the US and eight other Pacific Rim countries: Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. Japan, Canada and Mexico may join as the negotiations continue in 2012. But everyone sees the strategic accent in this claim. China immediately read these negotiations as a challenge to its own plan to lead east Asian economic integration, which it seeks to do by expanding its free trade agreement with Asean, the Association of Southeast Asian nations, to include South Korea, Japan and other regional states.
As the US negotiates the TPP, it has also announced a strengthened military engagement with Australia and will send 2,500 marines to be stationed in Darwin, just to the south of Indonesia, the largest southeast Asian country. Australia’s interest in that deployment, and the quiet acceptance of it by other Asian states, shows how countries in Asia feel the need to balance their economic engagement with China with their continued, even increased, strategic partnership with the United States. Australia is alarmed, like others, by China’s rising defence spending and the strategy it is developing to deny access in the surrounding seas. At the November 2011 east Asia summit in Bali, nearly every country raised concerns about China’s assertive stand on its claims to the energy-rich South China Sea. Indeed, disputes between China and other claimants in the sea are the cause of the 19th century-style gunboat diplomacy now becoming so prevalent in the region. Even a diminished US is sought by its allies as a Pacific policeman.
In 2011, China perhaps overplayed its hand in defending its national interests, and seeking to advance its economic and political ambitions in every direction. The decision by President Thein Sein of Burma in September 2011 to cancel the £2.3bn Myitsone dam project promoted by China Power Investment Corporation indicated frustration with Chinese business and economic power in the region. The Burmese regime was sensitive to popular opposition to the dam construction, its environmental hazards, and the fact that much of the resultant electricity would flow to China. Its rejection of the plan demonstrated the limits of China’s capacity to make uninterrupted advances into regional economies. It was also, crucially, a sign of the reluctance of neighbouring states to accept the political influence that investments of this type are meant to buy. Just as China has had to adjust its methods of investment in Africa, where its earlier tendency to import all-Chinese labour for infrastructure projects caused a backlash, so will it need to tread more softly in an Asian region that is simultaneously excited by China’s economic power and intimidated by it.
As a rising great power, China’s challenge will be to inspire less regional concern. When its new leadership becomes established, regional confidence building should be a high priority. The more China asserts a preference for a Monroe Doctrine—rejecting the role of “outside powers” in regional affairs—the more it will inspire other Asian countries to hang on to America’s coat-tails, and for the US to claim residency.
What’s of China’s economy? While there are justifiable concerns about Chinese housing bubbles, its banking system and the sustainability of its growth model, the sheer weight of China’s economic power has become systemically crucial. Just as Saudi Arabia is the world’s “swing” oil producer, the US is still the world’s swing geopolitical power, and China the world’s swing geo-economic player. The continued rise in its fortunes, or a temporary slump, is bound to have global impact. Its growing purchase of US debt gives it power, it can demand that companies transfer technological knowhow as a condition for granting access to its market, and it can control its exchange rate to stifle competition. But whether it will ever try to use its financial power to compel the US to limit its military engagement in the Asia-Pacific, or to take wider global advantage, is less certain. China is still above all a cautious power, and on global governance issues it has shown more diffidence than arrogance.
So far, China’s global economic influence has not brought an equivalent geopolitical role. Indeed, China, India, Brazil and other “rising powers” have not yet developed the strategic culture to support truly global foreign policies. Speed, a major element of contemporary power, is not their strong suit. As the Arab Spring evolved, these three countries found themselves behind the curve. China voted against the UN security council on sanctions against Syria, and India and Brazil abstained, even as the Arab League itself, not known for its diplomatic sprightliness, was suspending Syria’s membership of its club. Most Arab states are surprised by the slowness with which Asian and Latin American powers perceived and understood the changes in the Middle East. In late 2010, Brazil, with Turkey, tried to outflank the UN security council in mediating with Iran on its nuclear programme, only to be rebuffed by other council members including Russia. Many saw this effort as a poorly prepared diplomatic vanity project and, since then, Brazil in particular has been more reticent to design grand strategic initiatives.
The rise of these countries makes the world more egalitarian, not subject to a new global sovereign. As the west suffers from a form of strategic arthritis and exhaustion, these new powers still show signs of strategic growth pains and indecision.
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With Europe introspective, the US occupied with elections and economic repair, and China, India and other rising powers unable to take the initiative beyond their regions, whose actions will shape the international agenda? The answer is that the weak, the fragile and the collapsing will invite and force responses to their plight; the strong and the established will be unable to resist. Often, the power exerted by the weak is most significant—and today it draws dramatic reactions from the strong.
In 2011, after Europe promised Athens conditional financial assistance, it was alarmed by Greeks refusing gifts; the Gulf States were agitated by Yemen threatening to collapse; the US by Pakistan’s possible disintegration and increased militancy. Weakness is a great fundraising device: suggesting imminent or perpetual crisis is a splendid way to obtain financial or other favours. Expect more of this technique in the coming year. In 2012, China will continue to be so worried about North Korean refugees that it will want to prop up the regime. Western states will still direct a great deal of their intelligence activity at groups operating from ungoverned spaces. As the countries of Latin America push forward with modernisation, they will have to keep one eye alert to the demands of their weak indigenous populations, not yet benefiting from growth.
The past year has forcefully impressed upon governments across the world the need for accelerated reform in order to keep hold of power, or at least maintain control over how power may one day be shared with the opposition. Ideas and ideology still count; the “freedom” placards carried by protestors in the Middle East or, at another extreme, the stridently nationalist messages distributed by Chinese bloggers on the internet, shape and limit what otherwise powerful leaders can do. Reputation, too, is a great enhancer of force in international affairs, which is why “honourable exits” from Iraq and Afghanistan are so important for a United States that at least wishes to maintain its prestige, even as other elements of its power wane.
In 2012, after the dramas of the past year, most state power will be directed at managing the still-fragile global economy and mitigating the effects of things that go wrong. But we might also need to prepare for things that could go right. Political risk analysis does not focus enough on change that is good: strategists missed the collapse of the Soviet Union and the potential of the Arab Spring because they are, by nature, even more pessimistic than economists. Will 2012 bring a two-state solution in the Middle East, a secular republic of Iran, a unified Korean peninsula, a democratic Cuba or a free and liberal Zimbabwe? The odds are against. Yet in a world where power is more plural, there are many possible sources of change, both positive and negative.
Those interested in power, in the public or private sector, need to be ready to take advantage of good news, not just prepare for the bad. As no state, alliance or region has the full array of powers at their disposal; as the Rubik’s Cube of global power is not permanently aligned in anyone’s favour; the imaginative and the speedy have the edge. When no one is in charge, the world can feel as dangerous as when it is subject to the whims of a single power. Who will take the lead, at any given time, is anyone’s guess. For the US and its western allies, “regional solutions to regional problems” has long been the liberal rallying cry. Now, in more straightened times, it is a central objective of foreign policy, if only to limit liabilities. Yet few regions, including Europe, can take care of all their problems alone, and none can feel safe just managing the status quo. Weak regions have a way of drawing in reluctant outside support and assistance. Readiness is all. Power will flow to those who can cope with surprise and shocks, and will be drained from those who resist change, rather than shape it. In 2012, nominally weak people in badly-governed countries still have a chance to force reform; small states with clever leaders can cut a dash on the diplomatic stage; big states will not be able to shirk responsibilities. Power will be exercised primarily defensively, and the long-term leadership many call for will be largely absent. We must hope that the well-intentioned keep up the pace against the more malevolent.
