1.27.2009

LUSCUS' 8 CONFLICTS TO WATCH IN 2009

BY LUSCUS

Apologies for the delay, but I thought it would be a good idea to offer a few of my predictions for foreign affairs in 2009. They range from the hugely beneficial to the barely relevant to our daily lives, and pose a very diverse range of challenges to our new President and the world order.

The Predictions

1. Syria comes in from the cold. This has been bandied about for several years now, with America reaching out in 2005 to offer a 'Gaddafi' deal in the hopes that Syria will cease funding of Hezbollah and Hamas, refrain from interfering with Lebanon, and make peace with Israel in exchange for economic aid and access to the global market. Great Britain made a renewed push in November and December of 2008, with hopes that a Golan Heights deal would be the irresistible lure to a reportedly curious President Al-Asad.

This is part one of a three-step path to peace in the Levant. Syria and Iran have kept the Palestinian fire stoked with increasingly powerful weaponry for use against Israel. If Syrian support ends and some arrangement can be worked out with Iran, the table is set for a real solution to the Israel/Palestine question. Luscus is most in favor of a hybrid state (surprisingly similar to that presented by Pres. Gaddafi recently at a teleconference at Georgetown University, his published 'white book', and in an
op-ed for the NYT).

2. Pakistan comes dangerously close to another military coup. Going against conventional wisdom, military intervention in Pakistani politics has generally been a net positive. While I will not dismiss the gross violations of human rights that have occurred in 1958, 1977, and 1999, the military has been a main secular force in promoting stability and limiting corruption. Aside from jailing the Chief Justice of their supreme court, Iftikhan Chaudry, Luscus has been a fan of Musharraf. With the current presidency of "Mr. 10%" Asif Zardari and the rise of the Paksitan Muslim League, several circumstances could arise in which the military might feel necessary to intervene: breakdown in US-Pakistan relations, political and military failures in the North-west Frontier Province and/or Federally-Administered Tribal Areas, or economic collapse. The latter has been stemmed by a $7.6b loan from the IMF, but in this economic climate, who knows if that is enough?

3. Civil war in Sudan. The 2005 peace agreement allows for a popular vote on secession to occur in 2011, but a combination of pressure for action on Darfur, spillover from the Congolese conflict or northern Uganda, and the issue of the
mysterious arms shipment hijacked by Somali pirates from Kenya in September 2008 could lead to preemptive action by Khartoum. However, as President al-Bashir is already under indictment for war crimes, he may be hesitant to engage in further military action. But on the other hand he might feel that he has nothing to lose.

4. Military coup in Philippines. It seems that every year sees a new plot to overthrow President Macapagal Arroyo and the government of the Philippines. With rumors of US Special Forces being taught Tagalog (don't ask), this may be signal of preparation for a larger conflict.

5. Violence in the Crimea possible talk of secession, or Russian irredentism. With both the Russian and Ukrainian navies based in Sevastopol, this ethnic-Russian conclave of Ukraine might see movement to rejoin Russia (the Crimea was added to Ukraine in 1954 by Khrushchev should the political situation in Ukraine continue to deteriorate, or if Russo-Ukrainian tensions escalate due to the ongoing dispute over gas transfer and payments.

6. Resurgence of violence in Congo. This is perhaps the easiest prediction, what with three major conflicts inside or along DR Congo's borders.

First, that the winding-down of the Ugandan conflict with the Lord's Resistance Army (caused by the death of General Joseph Kony's spiritual inspiration, Alice, and breakdown of ceasefire talks between the government and Kony's son) does not occur, and fighting breaks out and spreads on both sides of the border. Second, the pursuit into DR Congo of Hutu militias by the Rwandan government, accused of complicity in the 1994 genocide of Tutsis. In 1996, the Hutu groups, fleeing from confrontation at the end of the Rwandan conflict, ran rampant through then Zaire, sending it into civil war and causing the transfer of power from Pres. Mobutu to Pres. Laurent Kabila (father of current president Joseph) and the re-naming of the country to the Democratic Republic of Congo. Lastly, this could be a pure collapse of government authority within the borders due to pressure from groups which have become entrenched and seeking greater permanence within the political structure.

7. Potential collapse of Mexican state. This is unlikely to occur in totality, but any increase in power held by the Sinaloa and Gulf drug cartels could threaten the government's legitimacy and definitely threaten state control of at least two of its northern provinces. President Calderon being a strong ally of the United States, as well as the proximity to our southern border and Mexico's rising preeminence in the flow of drugs to the US, expect increased American support.

8. Great Britain bankrupt. Considerable attention was paid during the collapse of Iceland's economy and government, what with the country's banking sectors making up a far larger share of its GDP than sustainable by its central bank. Other finance-intense economies have definitely taken notice. While this isn't 100% likely, the role played by 'the City' in the United Kingdom's economy is congruent to the situation in Iceland, albeit on a larger scale. Should the economic situation worsen, it remains to be seen how far the UK can remain solvent. Without a strong American manufacturing industry to fall back on (as has been the case in past crises), the increasing talk of joining the Euro should be taken as a sign of desperation. But on that point at least, the mood is not very different elsewhere.

Conclusion

I will insist that the best approach to our foreign policy is what I describe as 'Wilsonian Realism' that is, a realism moderated by an understanding that international consensus and international norms are wildly beneficial to our national security and to international stability at large. Its main aims are to provide for political stability through the promotion of international forae (formal or ad hoc), and a gradual focus of all countries towards good governance and responsible leadership, no matter the country's political form. Alternately, a Metternichian liberalism could be an apt description, of a slow and deliberate concert of powers-approach to promoting security, stability, and steady economic growth. Governor Richardson enumerated a similar policy in his Foreign Affairs article as a presidential candidate.

On a financial level, a new New Deal is foolish as a single package, as is now favored by the Democratic majority. A quick stimulus, combined with both the Judicial restructuring of mortgage rates to prevent foreclosures and a slow, gradual, ad hoc investment in our interstate commerce infrastructure (read: not simple handouts for individual states). As is a 'Bretton Woods II', as the global economy is too complex to be managed via a gold standard, or any alternative non-national reserve currency. Toward that end, greater transparency in accounting practices combined with a tightening of the screws on tax-havens and the abuse of FDI for market manipulation should put us on a more even keel.

This by no means is an exhaustive list - merely one that has compiled some of the major areas I have been following. Insight into the immediate futures of India and North Korea - perhaps the two elephants missing from the list - would be too complex, requiring a diplomatic sequence of Rube Goldberg proportions.

3 comments:

Tony Cannizzaro said...

As a note, I wasn't sure from your wording if you were in favor of or against judicial restructuring of mortgage loans.

This is one bit of policy that is primarily advocated by the democrats in which I give full support. Abolition of the mortgage "cram down" as it is most commonly known by the supreme court during the Clinton years was a foolish decision, removing an important mechanism for asset repricing from our housing market. The beauty of judicial modification was the adjustment of an inflated asset (house) price to a proper valuation without a nasty foreclosure (which negatively impacts all the property values around a foreclosed property). Long opposed by the Mortgage Banker's Association, sentiment is now moving back towards restoring the courts historic power, as Bank's begin to realize the GAAP value proposition of the modified loan, under mark to market accounting, is actually benefitial to the lender compared to recording a loss on the P&L and gaining a uselses piece of property. The National Home Builder's Association has reversed its stance on the law, as has Citigroup (see here: http://money.cnn.com/2009/01/08/news/companies/citi_home_bankruptcy/).


Not to mention it is the only form of consumer debt not subject to judicial modification - a ridiculous expection.

Ben Wheat said...

You don't address Iran in great detail either, I expected a short bit on that. I'm expecting Ahmedinejad to be replaced by a "reform" president in this year's election. The Supreme Council has, I think, had enough. Unless of course there are assurances from Russia that their saber-rattling will meet with unwavering support from the Kremlin.

Luscus said...

Apologies for not responding sooner -

Tony: I am 100% in favor of judges restructuring mortgages, as they 1) keep people in their homes, and 2) punish the mortgage companies for predatory lending practices or failure to perform due diligence when assessing the customer in the first place.

Ben: see 'THE MANTLE OF PEACE' for where I discuss Iranian presidential politics. I didn't want to go into Iran in too much detail, as it would warrant two post's worth of writing, including prospective Israeli strikes on Natanz (for historical references, see their strike on the Iraqi Osirik reactor), Iranian involvement in Gaza and Lebanon, Revolutionary Guard forays into northeastern Iraq, Russian and Chinese political and material support, and the 3 or 4 potential scenarios that could occur.

Hopefully that helps.