Yesterday’s discussion at SAIS of Learning to Live with Cheaper Oil : Policy Adjustment in MENA and CCA Oil-Exporting Countries raised serious issues. Oil prices are now expected to remain “lower longer,” as IMF deputy managing director Min Zhu put it. While contributing to global growth, the price decline is posing serious economic and governance challenges to the rentier states of the region and their relatively poor dependent cousins.
The 2014 oil price decline resulted from three main factors: increased production of tight oil and gas, slackening demand (especially due to economic slowdown in China and Russia) and increased efficiency. While prices have risen sharply from their lows early this year, the IMF expects them to remain well below their previous peak, with only gradual increases over the next five years or so to around $75 per barrel.
Some efficiency gains have already been erased, as oil prices have risen from their lows at the sharpest rate ever, even if they are still far off their peak. The shale revolution is not going away, even if many less productive wells have been shut. But larger ones are still producing. Much of the shut-in capacity will return as prices rise again.
This puts the oil producers in a difficult and long-lasting bind. The immediate impact was on their foreign exchange rate reserves, which are down dramatically. Growth is slowing. Budgets are being cut. The oil producers cannot continue to subsidize food and energy prices as well as avoid taxing their populations.
Sharply cutting their budgets however will not be a sufficient policy response, especially as it will have growth-reducing effects like limiting bank credit. The oil producers will need to undertake structural reforms to generate private sector growth that has heretofore been lacking. This is basically a good thing. Low oil prices will force producers to do what they’ve known for a long time they should have been doing, including cutting government jobs, reorienting it towards revenue collection rather than distribution and privatizing bloated state-owned enterprises.
But it is still difficult to picture how the oil producers will generate sufficient jobs to meet the needs of their bulging youth populations. If they somehow manage it, the social contract that has enabled the often non-democratic regimes to claim legitimacy will need revision, with citizens receiving less and asked to provide much more. Governing institutions will be under enormous strain as they try t o learn to collect taxes even as they reduce public services. Legitimacy will be in question. This is a recipe for trouble.
The fiscal squeeze will affect not only the oil producers themselves but also the states of the region to which they provide support, either in the form of aid or remittances. The eventual political consequences could be dramatic not only for the Gulf but also for Egypt, Jordan, Morocco, Pakistan and others. We have not seen the end of consequences “longer lower” will generate.
Colleagues at RAND have updated their peace proposal for Syria. This should be taken seriously, both because Jim Dobbins, Phil Gordon and Jeffrey Martini are sharp guys and because their previous version turned out to be prescient, or maybe just reflective of Administration thinking before the recent, now mostly lamented, cessation of hostilities. They want to put aside the difficult political question of transition, including the fate of Bashar al Assad, to focus on reducing the violence and extending the cessation of hostilities.
What they’ve done this time is to suggest four different ways in which decentralization could be implemented with Bashar al Assad still in place: one based on existing legislation, a second based on that plus additional taxing and security authority, a third acknowledges existing Kurdish autonomy, and a fourth that extends that autonomy to opposition and government controlled areas, more or less along the lines of their previous proposal. Wisely dropped from their original proposal is the ethnic/sectarian definition of “safe” zones, with the exception of the de facto majority Kurdish area along Syria’s northern border with Turkey.
All of this is perfectly reasonable as an outline of what might happen if the war continues. It just isn’t going to be possible for Assad to re-establish control over all of Syria. Decentralization is unquestionably part of the solution, as it is in Yemen, Libya and Iraq. The opposition already has local governing structures in northern and southern Syria, the Kurds are governing their “cantons” and ISIS unfortunately administers the territory it controls.
But as a proposal that keeps Bashar al Assad in place it looks distinctly like surrender. Assad himself yesterday made clear that he intends to reconquer all of Syria:
There is no sign that he would accept a peace that includes decentralization along any of the lines RAND recommends, even the one based on existing legislation. Nor is there any sign that the Russians and Iranians would compel him to do so. To the contrary: they are doubling and tripling down on their support for Assad’s offensives, most notably right now against Aleppo and Raqqa.
Nor is there any sign that the peacekeeping forces RAND mumbles quietly are necessary in both the original and updated version of its peace plan are going to be available. Even the Iranians and Russians are unlikely to deploy the tens of thousands required on the ground in Syria. Much less so the Qataris, Saudis, Jordanians or even the Turks. Years ago, the UN had polled more traditional troop providing countries and had identified 18,000 that might be made available. Today that number has certainly shrunk. A country the size of Syria would require well over 100,000 by the usual peacekeeping formulas.
The value of this second version of the RAND proposal lies in its careful attention to the pros and cons of different forms of decentralization. Assad is staying, but he won’t be able to achieve his territorial goal. The Americans, whose one real asset in Syria is the local governing structures they have supported, should be thinking about decentralization not with Assad, because he just won’t buy it, but despite Assad. Providing the security resources required to protect local governing structures, and weaving them together into a viable alternative to the regime, is a better plan than the surrender RAND is advocating.
With Hillary Clinton clinching the Democratic nomination, it is time to consider the far more likely scenario: that she will win the November election, become the first Madame President, and return to the White House in January. What are the implications for America and its foreign policy?
Trump’s defeat, the third in a row for Republicans, will leave the party weakened and possibly divided. It could well lose control of the Senate if not the House. Blame for this will be heaped on those who backed Trump, a blatant racist, misogynist and xenophobe. Balancing acts like this one will look ridiculous in the aftermath of an electoral defeat:
Those who did not support Trump will try to resurrect the direction the party thought it had chosen after the 2012 election: towards becoming more inclusive rather than less. That will be a hard sell once more than 70% of Hispanics (and 90% of African Americans), similar percentages of gas and lesbians, and a majority of women have chosen Clinton. Some of the defeated will try to launch a new party or join the Libertarians. Diehard Trumpies will head off into the white supremacist/neo-Nazi corner of American politics.
The Democrats will seek to exploit their moment of triumph. I imagine top of their priorities will be “comprehensive” immigration reform, including a pathway to citizenship for undocumented people. This would solidify their Hispanic support. I doubt Clinton will reverse her position on the Transpacific Trade Partnership (TTP), but she might well quietly encourage Barack Obama to get it done in the lame duck Congress, before she is sworn in, with some improvements. I hope she will back the Transatlantic Trade and Investment Partnership (TTIP), which raises fewer hackles that TTP.
Clinton will want to reassure America’s allies in Europe, Asia and the Middle East. She will look for ways to sound and act tougher on the Islamic State, Al Qaeda, Russia, Iran and China, which have each taken advantage of Obama’s retrenchment from the over-extension of the Bush 43 presidency to press the envelope on what Washington will tolerate. She will maintain the nuclear deal with Iran and likely try to follow a similar model with North Korea. She opt for a no-fly zone in northern or southern Syria, hoping to stop at that.
Clinton will try to sustain Washington’s tightened relationship with India, Vietnam and other Asian powers as well as ongoing moves towards democracy and free market economies in Africa and Latin America. She’ll try to avoid sinking more men and money into Afghanistan and will try to get (and keep) Pakistan turned around in a more helpful direction. Israel/Palestine will be low on her priorities–why tred on turf where others have repeatedly failed?–unless something breaks in the positive or negative direction.
Domestic issues will take priority, including fixes for Obamacare, increased infrastructure and education funding, reductions in student loan debt, criminal justice reform, corporate tax reform and appointment of at least one Supreme Court justice (unless Merrick Garland is confirmed in the lame duck session) and many other Federal judges at lower levels. She will support modestly increased defense funding and tax cuts for the middle class, funded by increases on higher incomes. She will tack slightly to the left to accommodate Bernie Sanders’ supporters, but not so far as to lose independents.
In other words, Hillary Clinton is likely to serve Barack Obama’s third term, correcting the relatively few mistakes she thinks he has made, slowing retrenchment and adapting his pragmatic non-doctrine foreign policy to the particular circumstances and events as they occur. It will take some time for the Republicans, or whatever succeeds them as the second major party, to figure out whether they are protectionist or free traders, anti-immigrant or not, interventionist or not.
Trump’s defeat will be momentous for the Republican party, but it will leave the country on more or less the same trajectory it has followed for the past 7.5 years. If she can keep it pointed in that direction for four more, we should be thankful.
I was in a chili joint on the south side of Chicago that night in the winter of 1967/8 when he walked in, bigger than I could ever have imagined: Muhammad Ali. He by then had won a gold medal at the Rome Olympics as well as the heavyweight championship, refused to be drafted, and was soon to be arrested and deprived of his title. No one should forget: America scorned him as draft dodger and a black Muslim with a loud mouth. Even today, his sharp tongue and mind will cause some to cringe.
But Ali has nevertheless become an icon, venerated far more than scorned. No doubt death will make that even more the case. There is no longer a risk he might say something that will offend.
Many have forgotten how they felt 50 years ago. It is now difficult to find the remnants of the “silent majority” that supported the Vietnam war, opposed integration and regarded the Nation of Islam as a serious threat to white people. Some of course have passed on. Some have simply gone to ground and will emerge to vote for Trump.
Others have changed their minds. America is not what it was when Muhammad Ali emerged on the scene. It is far less white, far more Hispanic and far more used to loud-mouth athletes, and politicians, of all races. Few Americans think Vietnam was worth fighting for and losing upwards of 58,000 of our citizens, more than eight times the number killed in Iraq and Afghanistan since the turn of the century. Most Americans today understand that Vietnam and the second Iraq war were mistakes that cost the country far more than any conceivable benefits.
Most Americans have also come around to the view that discrimination, segregation and racism are bad. That was not at all the prevailing view when Cassius Clay changed his slave name to Muhammad Ali. The white supremacist George Wallace was then governor of Alabama spouting, “Segregation now, segregation tomorrow, segregation forever.” In fact, racial segregation has persisted in schools and housing, but few would now defend it. Muhammad Ali’s extraordinary boxing career was compelling evidence of racial equality, though why more proof was necessary more than a generation after Jesse Owens’ performance at the 1936 Olympics is a mystery to me.
So some combination of forgetfulness and changing attitudes has made the scorned character who walked into a south side chili joint 50 years ago a great American hero. I give credit for that, but we shouldn’t forget that it wasn’t always thus. Muhammad Ali is the greatest today because America has forgotten more than it remembers and because so many of us have dropped beliefs that were once dominant. Fifty years from now, which of our now scorned citizens will emerge as great Americans?
PS: THIS VIDEO OF MUHAMMAD ALI SURPRISING KIDS AT SCHOOL WILL MAKE YOUR DAY! https://t.co/JAJSKEfRrs
— Mike Sanz (@mikesanz19) June 5, 2016
- A Transatlantic Strategy for a Democratic Tunisia | Tuesday, June 7th | 9:00-10:30 | Atlantic Council | REGISTER TO ATTEND | Please join the Atlantic Council on June 7 at 9:00 a.m. for a discussion featuring US and European officials and a panel of experts on assistance to Tunisia and the way forward for a new transatlantic strategy. Five years after Tunisia’s revolution, democratic and economic reforms have stalled. Following the revolution, the United States, the European Union, and EU member states – namely France, Germany, and the United Kingdom – substantially boosted assistance to Tunisia. But simply increasing support has not proven to be effective. In a new report titled, A Transatlantic Strategy for a Democratic Tunisia, authors Frances G. Burwell, Amy Hawthorne, Karim Mezran, and Elissa Miller present a new way forward for western engagement with Tunisia that makes clear the country’s priority status in the transatlantic agenda as it moves away from the immediate post-revolutionary period. The speakers will discuss the challenges facing Tunisia in the areas of economic development, security, and democratic development, and what steps the United States, the European Union, and key EU member states can take to help Tunisia meet these challenges and achieve greater stability and democracy. Paige Alexander leads the Bureau for the Middle East at the US Agency for International Development, where she oversees the efforts of USAID missions and development programs in countries across the region. Nicholas Westcott manages the Middle East and North Africa at the European External Action Service. Andrea Gamba focuses on Tunisia at the International Monetary Fund. Amy Hawthorne directs research at the Project on Middle East Democracy and focuses on Arab political reform and democracy promotion. Karim Mezran specializes in North African affairs at the Atlantic Council, specifically Tunisia and Libya. Frances G. Burwell concentrates on the European Union, US-EU relations, and a range of transatlantic economic, political, and defense issues at the Atlantic Council.
- Taiwan’s 2016 election and prospects for the Tsai administration | Wednesday, June 8th | 9:00-12:15 | Brookings | REGISTER TO ATTEND | On May 20, 2016, Taiwan inaugurated its first female president, Tsai Ing-wen. Along with the executive office, the opposition Democratic Progressive Party (DPP) gained a majority in the Legislative Yuan for the first time. The challenges facing the new administration, which President Tsai laid out in her inauguration address, are vast and complex ranging from pension reforms, environmental protection and unemployment concerns to regional economic integration and cross-Strait stability. On June 8, the Center for East Asia Policy Studies at Brookings and the Foreign Policy Research Institute (FPRI) will co-host a conference on the future of Taiwan under the Tsai administration. Panelists will present papers on how the 2016 elections impact domestic politics, cross-Strait relations and Taiwan’s external strategy, and what the elections mean for Tsai’s social and economic policy reform agenda and Taiwan’s aspirations for a greater role in international space. Orbis, FPRI’s journal of world affairs, will publish a special Taiwan issue with the conference papers. Following each discussion, panelists will take audience questions. Panelists may be found here.
- The Future of NATO Enlargement and New Frontiers in European Security | Wednesday, June 8th | 11:30-1:00 | Atlantic Council | REGISTER TO ATTEND | Recent events in Europe’s east and rising tensions with Russia have resurrected the debate of whether NATO enlargement is provocative or stabilizing. While NATO enlargement has boasted historic success stories, such as Poland and the Baltic States becoming strong and stable democratic allies. But Russia has designated Alliance enlargement as a threat to its national security. In Europe’s challenging new security environment, NATO took a bold step forward to sustain its open door policy by announcing Montenegro’s membership accession, paving the way for the Balkan country to become the Alliance’s 29th member. With Montenegro poised to potentially join NATO, the Atlantic Council is convening leading experts to discuss the Alliance’s future appetite for enlargement, the political implications of NATO expansion, and what it means for NATO’s frontiers in the south and east. Speakers may be found here.
- Learning to Live with Cheaper Oil | Wednesday, June 8th | 12:00-2:00 | Middle East Institute | REGISTER TO ATTEND | The recent, dramatic decline in global oil prices substantially altered the economic context and growth prospects for oil-exporting countries in the Middle East and Central Asia. Ambitious fiscal consolidation measures are being implemented, but budget balances may continue to deteriorate given the sharp drop in oil revenue. This presents both an opportunity and an impetus to revise energy subsidies and make deep structural reforms to support jobs and growth and facilitate economic diversification. The Johns Hopkins School of Advanced International Studies (SAIS), the International Monetary Fund (IMF), and The Middle East Institute (MEI) are pleased to host senior IMF officialsMin Zhuand Martin Sommer for a presentation on the policy adjustments undertaken by regional oil-exporters and the future prospects for their economies. Dr. John Lipsky (SAIS) will moderate an expert panel discussion following the presentation.
- Irreversible Damage: Civilian Harm in Modern Conflict | Wednesday, June 8th | 1:00-2:00 | U.S. Institute of Peace | REGISTER TO ATTEND | U.S. forces and their allies abroad have underestimated the irreversible damage done to their missions when they kill or harm civilians, says a new report by combat veteran and strategist Christopher Kolenda and human rights researcher Rachel Reid. Yet military forces can make changes to dramatically reduce civilian casualties-and did so in Afghanistan-without undermining their own force protection or ceding military advantage. Tragically, this hard-won lesson is often lost, as in the disastrous U.S. airstrike on an Afghan hospital that killed 42 people in October. Reid led research work for Human Rights Watch amid the Afghan war after years of reporting from the country for the BBC. Kolenda commanded airborne troops in Afghanistan and later helped shape U.S. strategy there and at the Pentagon. The authors interviewed more than 40 senior U.S. and Afghan officials as part of their study examining the complex relationships among civilian harm, force protection and U.S. strategic interests in Afghanistan. In that war, civilian harm by Afghan and international forces fueled the growth of the Taliban insurgency, and undermined the legitimacy of the international mission and Afghan government. In 2008, international forces were responsible for 39 percent of civilian fatalities. Major reforms by U.S. forces reduced that to 9 percent by 2012. The lessons about the irreversible damage of civilian harm have not been fully understood or institutionalized. U.S. partners fighting the Taliban, ISIS, and al-Qaeda in the Arabian Peninsula are inflicting high rates of civilian casualties with weapons and support from the United States, yet they seem no closer to success. The tragedy of the October U.S. airstrikes on the hospital in Kunduz run by Médecins Sans Frontières (Doctors Without Borders), showed that without consistent leadership attention, resources and training, hard-learned lessons can be lost relatively rapidly. In their report, published June 7 by the Open Society Foundations, the authors outline recommendations to promote civilian protection in ways that protect soldiers and advance U.S. interests.
- Engaging the Arts for a Vibrant, International Ukraine | Wednesday, June 8th | 3:00-4:00 | Wilson Center | REGISTER TO ATTEND | Jamala’s victory at the 2016 Eurovision Song Contest reminded the Ukrainian political class of the critical role arts and culture play in foreign relations and their unique ability to promote national interests. Ukraine’s culture holds tremendous potential to counteract what many perceive as a growing “Ukraine fatigue” in the West. To what extent do Ukraine’s political and economic elites grasp this possibility and have a strategy? The speakers will discuss how to develop Ukraine’s “soft power” in light of existing economic constraints and informational challenges. Speakers include Hanna Hopko, Member of Parliament and Head of the Foreign Affairs Committee, Verkhovna Rada of Ukraine, and Kateryna Smagliy, Director of the Kennan Institute in Ukraine. The panel will be followed by a reception celebrating the exhibition of Victor Sydorenko‘s photos, statues, and video works.
- Sub-Saharan Africa: IMF Regional Economic Outlook | Thursday, June 9th | 10:00-11:30 | Brookings | REGISTER TO ATTEND | After an extended period of strong economic growth, many sub-Saharan African countries have been hit by multiple shocks – the sharp decline in commodity prices, tighter financing conditions and a severe drought in southern and eastern Africa. Growth fell in 2015 to its lowest level in some 15 years and is expected to slow further to 3 percent in 2016. The growth performance, however, differs across countries, with most oil importers faring reasonably well. On June 9, IMF African Department Director Antoinette Sayeh will present the IMF’s Regional Economic Outlook for sub-Saharan Africa, which argues that the region’s medium-term prospects remain favorable but that many countries urgently need to reset their policies to reinvigorate growth and realize this potential. To this end, she will elaborate on how countries should both adjust their macroeconomic policies in the short run, and refocus policies to facilitate structural transformation and export diversification, so as to strengthen resilience and boost growth. After the presentation, Steven Radelet, Georgetown University Professor, and Amadou Sy, Director of the Africa Growth Initiative, will join Dr. Sayeh for a panel discussion moderated by Reed Kramer, Co-founder and CEO of AllAfrica Global Media. Afterward, questions will be taken from the audience.
- Brazil Under Acting President Michel Temer | Thursday, June 9th | 10:30-12:30 | Wilson Center | The uneven start of the administration of acting President Michel Temer, following the impeachment of President Dilma Rousseff by the House of Representatives and her suspension by the Senate, confirmed the complexity of the governability crisis that has and will continue to reverberate in Brazil for some time. During Temer’s first two weeks in office, two of his ministers were forced to resign after revelations of their alleged involvement in efforts to derail federal investigations into bribery schemes at state oil company Petrobras. The corruption probe has continued to enjoy widespread public support. The new government managed to approve a new 2016 budget deficit target in Congress – the first step in a difficult reform agenda meant to restore investor and consumer confidence, and ease the crisis later this year. The announcement of a new more pragmatic foreign policy, a shift away from the alliances between the Workers’ Party and its Bolivarian partners in South and Central America, encouraged Washington to express its sympathy for the constitutional process that led to Rousseff’s ouster. This has culminated in the US administration appointing a veteran career diplomat, Peter Michael McKinley, as the new US ambassador for Brazil. On June 9, with the Senate preparing to start Rousseff’s impeachment trial, the Brazil Institute will convene a panel of experts to take stock of the crisis and its possible developments. The discussion will start with an assessment of the economic outlook and the release of a survey conducted by Ideia Inteligencia on public sentiment regarding Temer’s interim government, the impeachment trial and the anti-corruption investigations. Speakers may be found here.
- Islamic exceptionalism: How the struggle over Islam is reshaping the world | Thursday, June 9th | 5:30-8:00 | Brookings | REGISTER TO ATTEND | With the rise of ISIS and a growing terrorist threat in the West, unprecedented attention has focused on Islam, which despite being the world’s fastest growing religion, is also one of the most misunderstood. In his new book “Islamic Exceptionalism: How the Struggle over Islam is Reshaping the World” (St. Martin’s Press, 2016), Senior Fellow Shadi Hamid offers a novel and provocative argument on how Islam is, in fact, “exceptional” in how it relates to politics, with profound implications for how we understand the future of the Middle East. Hamid argues for a new understanding of how Islam and Islamism shape politics by examining different modes of reckoning with the problem of religion and state, including the terrifying—and alarmingly successful—example of ISIS. On June 9, Shadi Hamid, Isaiah Berlin, Senior Fellow in Culture and Policy, and Leon Wieseltier will discuss the unresolved questions of religion’s role in public life and whether Islam can—or should—be reformed or secularized. After the discussion, Hamid will take audience questions.
Hillary Clinton went after Donald Trump on national security issues yesterday, landing lots of body blows and a head shot or two as well. She said he was unqualified to be president, both substantively and temperamentally. Her fans are applauding loudly.
It is easy enough to slam a guy who likes (and gets endorsements from) President Putin and Chairman Kim Jong Un. He also advocates withdrawal from NATO, US government default on its debts, nuclear weapons for Japan and South Korea, a blockade on Muslims from entering the US, and Mexican payment for a wall on the border. Little of what he says makes sense. Much of it is dangerous. But what would Hillary Clinton do (or not) about the Islamic State (ISIS), the civil wars in Iraq, Syria, Yemen and Libya, North Korea’s nuclear weapons and China’s challenges to freedom of navigation in the South China Sea?
She didn’t outline her own national security perspective. Her speech suggested little more than continuity with President Obama’s efforts:
We need to take out their strongholds in Iraq and Syria by intensifying the air campaign and stepping up our support for Arab and Kurdish forces on the ground. We need to keep pursuing diplomacy to end Syria’s civil war and close Iraq’s sectarian divide, because those conflicts are keeping ISIS alive. We need to lash up with our allies, and ensure our intelligence services are working hand-in-hand to dismantle the global network that supplies money, arms, propaganda and fighters to the terrorists. We need to win the battle in cyberspace.
I am no isolationist, but the fact is we’ve got more problems than our limited resources allow us to resolve. That’s an important part of the reason Barack Obama tried to get us out of Iraq and Afghanistan and refused to get involved in post-Qaddafi Libya. But withdrawal and abstention left vacuums that ISIS and the Taliban have filled. How would President Clinton bring our capabilities and resources into balance with the requirements? Which problems would she put at the top of the list, and which at the bottom?
President Obama succeeded in getting a decent nuclear deal with Iran, but Tehran continues its regional destabilization efforts in Yemen and Syria. North Korea continues to test nuclear weapons and, without success, ballistic missiles while China continues to build artificial islands. What would President Clinton do to counter them?
It is widely believed that Clinton is more hawkish than Obama, because she recommended the Libya intervention and voted for the Iraq war. But it is one thing to advise the president, or vote in the Senate. It is another to make your own decisions once you hold the levers of power. The admittedly stirring speech–I dislike Donald Trump’s fakery as much as the next liberal internationalist–did little to clarify Clinton’s own positions on the issues.
Of course there is time in what will be an excruciatingly long campaign. Campaigning is also different from advising and governing. Questioning your opponent’s basic qualifications seems a good enough place to start. But it is a cerebral exercise, not an emotional one. It depends on demonstrating incoherence.
That is not an adequate response to Trump. His talent is that he has tapped into a reservoir of emotions, including misogyny, Islamophobia, xenophobia and racism, that were out there and waiting to be exploited. Clinton tried but was less successful at tapping into a strikingly different reservoir: one that treasures pride in the liberal world order, confidence in American talents and optimism about the country’s political and economic future. Here’s hoping she finds the right way!