Monday, November 30, 2009

Help Wanted: Second Superpower Needed in Middle East

Iran's announcement that it plans a massive expansion of its nuclear program couldn't come at a worse time for the Obama administration. And President Mahmoud Ahmadinejad knows it.

Right on the heels of a pointed rebuke by the UN's nuclear watchdog agency over its nuclear program, Ahmadinejad announced that the country would build ten more reactors.

Obama is in trouble on all side with Iran. Conservatives are sure to say that Obama's efforts at rapprochement, were interpreted as weakness by Tehran. Meanwhile, the President has just ordered thousands of more troops into neighboring Afghanistan. And with Obama declaring that the war will continue until 2017, Iran knows that there is no chance of a credible military ultimatum from the administration.

Meanwhile another debt fueled holiday season puts the U.S. further in debt to China. Mounting American debt to China in this economic mess takes away American ability leverage China, as Secretary of State Hillary Clinton, said recently. And without China even weak sanctions are impossible.

And Iran for its part has every reason to push for confrontation. With the regime still recovering from the shock of this summer's street uprising, Ahmadinejad is eager for anyway to redirect youthful anger on a shoving match with the West.

Obama has a very difficult line to walk on Iran. Making threats that he can't deliver on will make Iran's leaders even more eager to test new red lines, while giving the regime a greater mandate to crack down on dissent. But the further along that Iran gets on the potential of building a bomb, the harder it will be for anyone to reign them in.

The only real hope is that China can be convinced to assert its new role as a global superpower. In some ways China has the most to lose if the Middle East were to explode. If Israel were to launch strikes against Iran's reactors there would be a real possibility of regional war that would drive oil prices through the ceiling. A huge 1970's-style oil hike would throw the breaks on China's march to development.

China is in a unique position to offer Iran a stake in its future growth through trade agreements. China also can offer Iran a boost through helping to rebuild the country's crumbling infrastructure - power generators, refineries, major highway systems.

Iran's stalled economy is one of the causes of the regime's instability and therefore a big part of the reason it needs to pick fights with America. The U.S. is in no position to do massive development projects in Iran, and neither nation's populations would like it much, anyway. But China could take this role, gaining stability in a critical region while building relations and leverage over a country with resources it needs.

Obama's best move in Iran might be to convince China it needs a piece of the action.

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Tuesday, November 10, 2009

Hillary: America Has Lost Its Flex

In a moment of striking candor, Secretary of State Hillary Clinton said that the financial crisis has left America's power blunted.

The United States, unfortunately, has lost leverage in the world because of the global economic crisis and because of the steps that this administration had to take to try to prevent, frankly, a worldwide depression, which means increasing our debt, going into the biggest deficits we've seen since World War II. That undermines some of the capacity we need to have to influence events...
It might be a historic first - a sitting secretary of state predicting the decline of American power.

The comments, made on the Charlie Rose Show last night, were made more surprising when Clinton clarified that even after the crisis ends, America will not get back its flex -- we are going to owe too much cash to the countries we want to influence.

But the fact is when we do have that recovery and we can all look at it, touch it and feel it and feel better about ourselves and the world, we're going to be hugely in debt, and we're going to have deficits that will impinge upon our ability to make decisions and will also affect our capacity to deal with other countries because we are in debt to them.
The admission or pronouncement, on the Charlie Rose Show last night, was made in the context of Clinton saying that America will reach out to parts of the world that were neglected during the Bush administration.

"We are back," she said.

And "back" on the big issues that the administration cares about - climate change, Sudan, energy issues.

But why cast the the renewed engagement in the light of lower expectations? Sure being in debt to China is going to make it harder to get them to do what we want - but why say so?

Perhaps with the United States embroiled in two wars that we don't know if we can win, and heaps of other problems like climate change, or say Darfur, that cannot even hope to be addressed by one nation, Clinton may be doing for the U.S. what many CEOs or many big corporations have been doing in the last six months: Adjusting expectations downward.

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