The Washington Diplomat

Middle East
The most closely watched region in the world—and the least stable—is the Middle East, where the ongoing war in Iraq and seemingly never-ending Israeli-Palestinian conflict will dominate headlines in 2008, as will Iran’s nuclear ambitions and the skyrocketing price of oil—which is fueling the greatest transfer of wealth in world history.

Nearly 4,000 U.S. soldiers have died in Iraq since the war began, and given the current scenario, U.S. forces are likely to remain there for quite some time to come.

Iraq’s defense minister, Abdul-Qader Mohammed Jassim al-Mifarji, recently said Iraqi troops won’t be able to assume responsibility for the country’s internal security until 2012, or be able to defend Iraq’s borders before 2019.

Yet with things quieting down somewhat in recent months, recommendations announced in mid-January call for U.S. overall troop strength in Iraq to be reduced from the current 160,000 to about 130,000 by July—with more soldiers moving out of front-line combat and into assignments that allow soldiers to monitor and support U.S.-trained Iraqi units.

“With the withdrawal of the first brigade combat, we began the process of a transition of mission,” U.S. Defense Secretary Robert Gates told reporters on Jan. 18. “Ultimately, the mission will be one that we call strategic over-watch, which is basically where we are not engaged on a daily basis and where the Iraqis are in the lead and we are providing support.”

But Col. Lawrence Wilkerson, former chief of staff for Secretary of State Colin Powell and now an ardent critic of current U.S. policy in Iraq, paints his own version of events to come later this year.

“President Bush and his people will find, about summertime if nothing changes, that troop withdrawals can begin in earnest, and with the Iraqi government doing things better than before, you’re going to see the U.S. reposition its forces in the Middle East, with more troops at sea, pre-positioned stocks in places like Kuwait, and exercises like the recent Bright Star with Egypt,” predicted Wilkerson. “Regardless of what happens in Iraq afterward, we’re gonna say, ‘New president, it’s your problem.’”

Some predict 2008 could be the year Iraq disintegrates into fragmentation, as Sunnis, Shiites, Kurds and other ethnic groups vie for control. One big question mark is Turkey, which has been conducting occasional raids into northern Iraq in search of outlawed Kurdish rebel groups.

Another question mark is Iran, whose suspended nuclear program has been making headlines of its own recently. The National Intelligence Estimate released in December 2007 that concluded Iran had halted its nuclear-weapons program in 2003 certainly changed the landscape. However, the 140-page report also found that Tehran had previously been working to put together a nuclear bomb and still possessed some of the elements for such a program.

The NIE has dampened Bush’s support in the United Nations for harsher sanctions on Tehran, and critics have seized on the report to blast the president for beating the war drums without credible evidence—drawing parallels with Iraq.

But Bush seems to be undeterred. Asked recently for his views on Iran’s intentions, the president told Fox News: “I believe they want a weapon, and I believe that they’re trying to gain the know-how to make a weapon under the guise of a civilian nuclear program.”

No one fears a nuclear Iran more than Israel, the likely target of such bombs, given continual threats by President Mahmoud Ahmadinejad.

“To forestall the threat of a nuclear Iran, Israel should enhance the development of its own indigenous capacities to develop the defense systems which protect the Israeli civilian population and to rely on ourselves,” Ephraim Sneh, a top Israeli Labor Party voice on security issues, told the JTA news service last month.

This May marks the 60th anniversary of Israel’s establishment, an event that’ll be celebrated by Jews around the world and mourned by Palestinians, who are increasingly being torn apart by the two factions vying for control in the West Bank and the Gaza Strip: Fatah and Hamas.

Both Mahmoud Abbas, leader of the Palestinian Authority, and Ehud Olmert, Israel’s prime minister, face uncertain futures as relations between the two sides continue to deteriorate in the months following the Annapolis peace conference.

Large-scale Israeli raids into Gaza following Hamas-sponsored rocket attacks on Israeli border towns have pushed Abbas to the brink of resignation, while Olmert of the Kadima party faces allegations of corruption and sharp criticism over his handling of the 2006 war against Hezbollah militants in Lebanon.

Through it all, Israelis and Palestinians will continue nego_tiating, though little progress is likely unless Israel freezes construction of settlements in the West Bank and the Palestinians dismantle what the Israelis call “terrorist militias.” Bush, speaking in the West Bank city of Ramallah during his recent tour of the region, said he’s “confident that with the proper help, a state of Palestine will emerge” by the end of 2008.

Petroleum prices hovering around $100 a barrel, meanwhile, will continue to fuel the transfer of hundreds of billions of dollars from the United States, Europe and Japan to oil-exporting nations such as Saudi Arabia, Kuwait, Qatar and the United Arab Emirates. Oil wealth has already transformed the skyline of Dubai, which boasts among other things the still-under-construction Burj Dubai—with 158 stories, already the tallest building on earth.

South Asia
India, the world’s largest democracy, occupies only 2.4 percent of Earth’s total land area but accounts for 15 percent of its population. With 1.13 billion people, the country is expected to overtake China in population as early as 2045.

Economically, it is doing well, with GDP growing by an annual average of 8.6 percent during the three years the Congress-led United Progressive Alliance (UPA) coalition of Manmohan Singh has been in power. But recent communist protests over a controversial U.S.-Indian deal on civilian nuclear technology is now likely to force early elections—a development that might not be good for the economy, which is expected to see 7.9 percent GDP growth this year.

Meanwhile, two of the world’s most dangerous countries, Pakistan and Afghanistan, will continue to be dangerous in 2008.

The Dec. 27 assassination of Benazir Bhutto, President Pervez Musharraf’s most powerful opponent, has thrown Pakistan into disarray. Although national elections are scheduled for Feb. 18, few expect Musharraf—whom President Bush has called “a loyal ally in fighting terrorists” and “somebody who believes in democracy”—to ensure that those elections will be free and fair.

Bhutto’s son, Bilawal Bhutto Zardari, has been named the new leader of the Pakistan People’s Party, with his father, Asif Ali Zardari, as co-leader. Meanwhile, opposition leader Nawaz Sharif, a former prime minister, accuses Musharraf of destroying Pakistan, blindly following Washington’s orders and ordering anti-terror operations that have “drowned the country in blood.”

Several observers warn that the Islamic republic, which possesses at least 50 nuclear warheads, could be headed for chaos this year if the elections don’t produce stability soon. Musharraf himself faces a loss of credibility in Europe and to a lesser extent the United States, his main benefactor, which is depending on the general to rein in al-Qaeda terrorists along Pakistan’s violent border with Afghanistan.

In Afghanistan, the world’s largest opium producer, drugs continue to fuel a Taliban insurgency against the U.S.-backed government of President Hamid Karzai. NATO alone has deployed more than 40,000 troops to fight the rebels, which have waged an increasingly violent campaign in the south of the country.

“I expect to see yet another year of explosive growth in poppy, and I think that will again complicate the security sector,” said Gen. Dan McNeill, commander of NATO’s International Security Assistance Force, in comments to Agence France-Presse. “When I see a poppy field, I see it turning into money and then into IEDs [improvised explosive devices] and Kalashnikovs. It poisons the youth of Afghanistan.”

In 2007, the bloodiest year for Afghanistan since Taliban fanatics were ousted in 2001, more than 6,000 people were killed throughout the war-torn nation. Most were Taliban rebels, though that number also includes about 1,000 Afghan civilians, 1,000 members of Afghan security personnel, and 220 foreign soldiers.

In overcrowded Bangladesh, home to 140 million people, the army-backed interim government is vowing to hold free and fair elections by December 2008, amid an anti-corruption drive that has ensnared former Prime Ministers Sheikh Hasina Wajed and Khaleda Zia, among others. But it’s doubtful those elections will take place, and violent protests are likely to ensue as a result. The same is true in Nepal, where Maoist rebels have long been locked in a battle with the government in Kathmandu.

The rebel war in Sri Lanka continues unabated, with a Jan. 20 attack by government troops leaving 41 Tamil Tigers dead in northern Jaffna province and elsewhere. It is unlikely that any sort of ceasefire between the rebels and the government of populist President Mahinda Rajapakse will hold up through 2008. And in Burma (Myanmar), there is little prospect that the military junta in Rangoon will loosen its stranglehold on the country, despite last year’s promising sparks of defiance by legions of Buddhist monks.

The one exception to all this chaos is the tiny Himalayan mountain kingdom of Bhutan, which is also expected to hold parliamentary elections later this year—the first-ever such elections for this kingdom of 700,000 people. Interestingly, Bhutan has banned anyone without a university degree from running, a move that bars more than two-thirds of the country’s current, unelected assembly.

Asia / Pacific
2008, the Year of the Rat, will undoubtedly be China’s year, capped by August’s Summer Olympics in Beijing—and locally by the completion of a sprawling new Chinese Embassy in Washington, which will rank among the largest diplomatic missions on Earth.

This year, according to the Economist, China, with 1.33 billion inhabitants and a GDP of $3.9 trillion, will inject more wealth into the world economy than any other country—as much as the United States, India and Japan combined. Its projected GDP growth rate of 10.1 percent makes it the fourth fastest-growing country in the world.

Among other things, China this year will become the world’s top exporter, displacing Germany from that spot. It will also become the number-two importer after the United States while becoming the third-biggest economy in the world, after the United States and Japan.

In 2008, predicts the magazine, China will also overtake the United States as the country with the largest number of Internet users. E-commerce will become an integral part of the booming Chinese economy, with more than 1 million Internet entrepreneurs starting up businesses. China’s Industrial and Commerce Bank (ICBC) has already overtaken Citigroup as the world’s biggest bank by market value, and it’s only a matter of time before China’s total stock-market capitalization exceeds that of America’s.

The main event of 2008, of course, is the Beijing Summer Olympics. Still half a year away, the games have already managed to focus the world’s attention not only on China’s economic successes but also on its dismal environmental record, continuing human rights violations and ongoing Chinese support for repressive regimes like Burma, Sudan and North Korea—although the threat of nuclear pro_liferation from Pyongyang may actually subside this year if the North Korean regime of Kim Jong-il signs a disarmament deal as expected.

In recent years, China has used its so-called “soft power” to increase Chinese influence in Asia, Africa and Latin America. Over the past decade, China has emerged as a global actor in regions where it’s been absent for decades, relying on a combination of growing international aid, more sophisticated public diplomacy, and promotion of Chinese culture while downplaying its military strength and economic might to achieve this objective (see also January 2007 issue of The Washington Diplomat).

For example, China is now the biggest aid donor in three Southeast Asian countries: Cambodia, Laos and the Philippines. It has also become a leading trade partner of Brazil, a major investor in Cuba, and has increased its visibility in the Caribbean and Africa, where it hopes to woo the few countries that still maintain diplomatic relations with Taiwan to switch their loyalty to Beijing. Last month, the impoverished African nation of Malawi became the latest country to jump ship, announcing on Jan. 14 that “we have decided to switch from Taiwan to mainland China after careful consideration of the benefits that we will be getting from mainland China.”

Relations with China will figure prominently in Taiwan itself, where presidential elections are scheduled for March 22. The two major candidates are Frank Hsieh of the ruling Democratic Progressive Party (DPP) and Ma Ying-jeou of the opposition Kuomintang (KMT).

In January, the KMT—which favors closer political and economic ties with mainland China—overwhelmingly won legislative elections, taking 86 of 113 seats in Taiwan’s parliament. This makes a KMT victory in March more likely and could signal a thawing of the chill across the Taiwan Straits. It’s also possible that direct flights between Taipei and mainland China could begin later this year. A KMT-led government is expected to focus on fighting corruption and raising Taiwan’s economic growth (currently at 4.6 percent) toward the rest of Asia.

Economic performance in Southeast Asia will continue to be impressive, led by communist Vietnam (projected 8.1 percent growth in 2008), Indonesia (6.4 percent), Malaysia (5.8 percent), Philippines (5.6 percent) and Singapore (5.1 percent), the last of which is working on a free trade agreement with China that’s likely to be signed before year’s end.

Indonesia, the world’s most populous Muslim nation, has recently seen outbreaks of anti-Christian violence, though the influence of radical fundamentalism is still quite limited. Indeed, a form of “soft Islam” is on the rise, reports the Economist, with secular political parties attracting voters by forming Islamic, but not Islamist, wings well ahead of Indonesia’s 2009 presidential and parliamentary elections. In the Philippines, however, a bloody Islamist insurgency continues in spite of anti-terrorist legislation introduced in 2007, which could spell trouble ahead for President Gloria Macapagal-Arroyo.

Thailand, too, has been plagued by a Muslim insurgency that continues to wrack its southern provinces. Tepid progress was made on the political front though, as Thailand’s parliament reopened late last month, marking the end of 16 months of military rule. However, ousted leader Thaksin Shinawatra—whose People Power Party returned to parliamentary rule in December—remains a wild card in the country’s political future. The billionaire businessman remains in exile in Britain but still enjoys support in his homeland, where the military has made it clear it will do whatever it takes to keep Thaksin from returning to power.

In South Korea, Lee Myung-bak will officially take the helm as the newly elected president on Feb. 25, and some analysts say Lee’s conservative government may take a more forceful stance on North Korea than the outgoing administration of President Roh Moo-hyun and his “sunshine policy.” Despite allegations that he was involved in a corruption scandal, Lee, a former Seoul mayor and self-made millionaire, seems to espouse the can-do attitude that many Koreans are looking for to boost their sagging economy. According to the Council on Foreign Relations, Lee’s election “capitalized on these concerns by pledging 7 percent economic growth, raising income per capita from the current $18,000 to $40,000, and aiming to make Korea the world’s seventh-largest economy.”

And in Japan, Prime Minister Yasuo Fukuda will spend much of 2008 defending his Liberal Democratic Party from challenges by the opposition Democratic Party of Japan, though the Japanese economy is finally on the mend after years of stagnation and is expected to grow by a modest 1.9 percent this year.

Japan will take center stage in July, when the Group of Eight summit takes place on the island of Hokkaido, where climate change is sure to be the hottest topic.

In November, Peru will host the 20th annual summit for APEC (Asia-Pacific Economic Cooperation), a loose grouping of 21 Pacific Rim countries that accounts for 41 percent of the world’s population, 56 percent of world GDP, and 49 percent of world trade.

And in Australia, Prime Minister Kevin Rudd of the Labor Party will face his first year in office, having replaced John Howard’s long-running conservative administration—one of President Bush’s staunchest allies—by promising the country a rejuvenated government.

On the 2008 agenda will be carrying out Labor’s promise to ratify the Kyoto Protocol and maintaining Australia’s thriving economy. “Next year is going to be exceptionally busy,” Rudd said following his landslide victory in November. “The plan for the future is there; I intend to implement it.”

Larry Luxner is news editor of The Washington Diplomat.

Anna Gawel, managing editor of The Washington Diplomat, contributed to this report.