2012 Global Forecast

Risk, Opportunity, and the Next Administration

Washington does not typically focus on objective foreign policy analysis and bipartisan solutions six months before a U.S. Presidential election. Election years by their nature tend to bring out the worst of the partisanship, shrill advocacy, and superficial debate that has come to characterize Americans’ view of the capital. Administrations spend the election run-up trying not to generate unwanted headlines, while opposition parties treat every government action, no matter how small, as a referendum on American power and purpose. In such a hyperbolic environment, strategic thinking and sensible solutions are in short supply.

This campaign season in particular, foreign and defense policy has to date remained largely in the background. This is true for a number of reasons. First, most voters seem to think that electoral success ought to hinge on who will be the best steward of the U.S. economy going forward. Second, one of the main animating issues this cycle is the role of government in American life, something that does not have direct relevance to foreign affairs. And third, the ongoing war in Afghanistan has not become a major campaign issue given the country’s general state of war weariness. When foreign policy issues do arise, such as concern over military confrontation with Iran, they have not sustained the country’s attention. Absent a real crisis, both Republicans and Democrats appear content to make 2012 a “domestic” election.

Of course, Washington’s focus on domestic issues does not mean that challenges abroad dissipate or disappear. In fact, to take as broad of a brush as possible, the two principal dynamics at play at home and abroad right now are working adversely to U.S. interests: contraction of resources on the home front and rising volatility and complexity of challenges overseas. This does not have to equate to American decline, but it does mean added risk. Every senior national security leader in Washington is struggling with how to allocate the shrinking resources on hand to address an expanding problem set.

The overall challenge for the United States is to make decisions of force posture, diplomatic presence, and economic assistance from a comprehensive, long-term, strategic perspective rather than in an ad hoc manner. Decisions to lower troop levels abroad, scale back collection and analysis capabilities, surrender the diplomatic initiative, or slash foreign aid may be budgetary necessities in this new era, but every action will send a signal overseas that will have consequences. Mapping these risks—and indeed, managing them—will not guarantee a safe and prosperous world, but it will certainly be better than the alternative.

What the reader will find here in the 2012 iteration of Global Forecast is an effort to look ahead after November’s elections to predict what will be the main risks and opportunities facing the next administration, whether a second Obama term or the first for a Republican president. What are the big issues facing our country that leaders from both parties are not sufficiently prepared to address? Where is an entrenched policy consensus blinding us to the possibility of sudden change, unintended consequences, or harmful second order effects? How can the United States better recognize and capitalize on new opportunities that might arise? This small volume is not meant to be comprehensive, but to provide a window into the thinking of CSIS’s exceptional team of experts who are in demand every day by the private sector, our government, and the media.

Part I, “Building a Foundation of Security,” lays out how the U.S. fiscal situation is having an impact on our national security. To quote CSIS’s Chairman of the Board, Senator Sam Nunn: if the crime is runaway deficits, national security will be one of its principal victims. CSIS’s President & CEO John Hamre analyzes our predicament: we are imperiling national defense without guaranteeing the foundation of our security over time. Despite the cost-cutting mood in Washington today, James Lewis argues for a continuing role for federal investment to secure strategic goals. Anthony Cordesman looks at the main perpetrators of the deficit “crime”: government’s inability to compromise on entitlements and taxes, which has now raised the specter of sequestration. David Berteau and Stephanie Sanok examine what sequestration might mean for U.S. force posture, particularly critical in the Asia-Pacific in light of China’s rise. Michael Green asks what proposed cuts might mean for sustaining a U.S. presence in Asia over the long-term.

Part II, “Assessing Major Regional Challenges,” looks at five complex geopolitical issues that will likely require U.S. attention in the year ahead. Bonnie Glaser analyzes the possible unintended consequences of the pivot to Asia, examining how Beijing’s reaction could affect U.S. allies and interests. Andrew Kuchins explores the growing Russia- China relationship and how it might flower as newly elected President Vladimir Putin’s domestic situation becomes less stable. Bulent Aliriza and Stephen Flanagan explain how unrest in Syria is jeopardizing Turkey’s relationship with both Iran and Russia and complicating its position in the region. Jon Alterman looks at what the next iteration of the Arab Spring might look like, examining the potential for disruptions in Jordan, Morocco, and Saudi Arabia. And Heather Conley argues that the European financial crisis is having second order effects that could undermine Europe’s very foundation of liberalism.

Part III, “Anticipating Instability and Recognizing Opportunity,” tries to foresee where the next administration might either get pulled in to an unforeseen crisis, or might want to try to shape a new environment. With regard to potential crises, Victor Cha reminds us of Pyongyang’s unpredictability, Stephen Johnson highlights the risks of decaying authoritarians in Latin America, and Johanna Nesseth Tuttle and Kristin Wedding look at food prices as a driver of instability. On the positive side, Ernest Bower, Meredith Broadbent, and Matthew Goodman discuss the evolving economic picture in Asia and how the United States can best orient its trade policy toward the region. Karl Inderfurth and Amer Latif look at the potential transformational benefits of trade between India and Pakistan. And Jennifer Cooke provides a positive vision of Africa’s possible economic takeoff.

Part IV, “Managing Nuclear and Proliferation Risks,” drills down into some of the toughest challenges any government will have to face: how to use technological advances to protect and provide for citizens without exposing them to catastrophic risk. Clark Murdock and John Warden examine the difficult decisions the next administration will face concerning new nuclear delivery systems, infrastructure investments, and most important, what nuclear strategy to pursue. Sharon Squassoni looks at the range of proliferation challenges facing the next government, including from Iran and North Korea. Michael Wallace and Sarah Williams provide a sobering assessment on how the potential wind down of America’s nuclear industry could coincide with a massive nuclear build-up in Asia, creating new security challenges in the years ahead. Carol Kuntz looks at proliferation of a different sort: biological threats and why our current Cold War approaches are likely to fail to prevent an attack.

Finally, Part V, “Developing New Security Paradigms,” takes as its premise that a new administration will seek to look with clear eyes at the world and develop original frameworks for addressing new challenges. Frank Verrastro writes on how shale gas and tight oil are completely changing how we ought to think about energy security. Juan Zarate takes an equally sweeping view of “geoeconomics,” arguing that our current government is not well prepared to address the confluence of geopolitical and economic problems that will face us in the years ahead.

The next three pieces look at issues that have consumed great attention over the past decade: first, how to confront Al Qaeda after Bin Laden’s death? Thomas Sanderson argues that we should not look for a new paradigm quite yet. Rick “Ozzie” Nelson and Rob Wise then look at the internal U.S. government tensions likely to arise as U.S. Special Forces seek to expand their mission set. And Nathan Freier and Robert Lamb discuss what stability operations might look like after Iraq and Afghanistan. Their answer may surprise you. The final three articles look at “soft power” in this time of austerity, often the first place an administration and Congress look to make cuts. Stephen Morrison writes on how to sustain the global health gains of the last decade. Daniel Runde examines what is in some circles a taboo topic: closing aid missions in middle income countries. And Walter Douglas explores why public diplomacy has ceased to be at the forefront of public debate and how the next administration should think about the challenge at hand.

Global Forecast 2012 provides a snapshot of CSIS’s collective wisdom on the challenges facing the next administration in the years ahead. Although the focus is on foreign and defense policy, this is a year when our domestic debates are intrinsically tied to long-term success abroad. Failure of the next Administration to recognize the risks and opportunities in both settings will have consequences for years to come.

Josiane Gabel

John J. Hamre, James A. Lewis, Anthony H. Cordesman, David J. Berteau and Stephanie Sanok, Michael J. Green, Bonnie S. Glaser, Andrew C. Kuchins, Bulent Aliriza and Stephen Flanagan, Jon B. Alterman, Heather A. Conley, Victor D. Cha, Stephen Johnson, Joha