Saturday, October 29, 2011

“If we lose Egypt, we effectively lose the Arab Spring.”

The euphoria over the end of the Gadhafi regime has been amplified by satisfaction at the outcome of the Tunisian elections. US officials now see more opportunity to press for reform in Syria and Yemen. However, as before, Egypt remains the focus of concern with analysts worried that vested anti-reform interests will set back democratic institution-building there. As one NSC official commented privately to us: “If we lose Egypt, we effectively lose the Arab Spring.” Of concurrent interest is Secretary of Defense Panetta’s continuing trip to Asia. There is little doubt that a “pivot” in US foreign policy is taking place in favor of the Pacific. Though long-anticipated by commentators on international relations, this shift is now becoming manifest. There are three drivers: 1) the perception of a permanent rise of the Asian economies. In a comment on the Eurozone negotiations to end the crisis there, one Treasury official said to us: “You see, the Europeans have to beg the Chinese to solve their problems for them. That is where the money will be in the 21st century”. 2) The rising sense of threat perception from Asia, particularly in the cyber arena. One top Pentagon leader told us: “we are militarily dependent on our network of satellite and underwater cables. They are at their most vulnerable in Asia.” 3) The need to respond to diminishing defense appropriations by trimming strategic engagement outside Asia. Pentagon officials are quick to reassure concerned Europeans that the US is not turning its back on NATO. However, as the Libya operation demonstrated, the US will in the future not necessarily take a full leadership role if it deems that its strategic interests are not at stake. Similarly, the decision not to insist that Iraq permits continued US basing after the end of this year reflects a wish to avoid expensive over-commitment. For this reason, we expect that the timetable to withdraw from Afghanistan by 2014 will be adhered to, despite the recent upsurge in violence there. Finally, the top priority facing Washington policy makers over the coming weeks will be the budget. The Congressional ‘super committee’ is due to report by Thanksgiving, but signs are multiplying that it will be deadlocked. Another period of financial uncertainty may like ahead. 

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