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Critical Questions for 2012

What are 2012’s most Critical Questions?
By Jennifer G. CookeBonnie S. GlaserJames Andrew LewisClark A. MurdockJanusz BugajskiFrank A. VerrastroHeather A. ConleyRichard JacksonJ. Stephen MorrisonRick "Ozzie" Nelson,Meredith BroadbentAnthony H. CordesmanArnaud de Borchgrave,Michael J. GreenVictor ChaJon B. AltermanAndrew C. Kuchins,Ernest Z. BowerBulent AlirizaDaniel F. RundeKarl F. Inderfurth,Stephen JohnsonRobert D. LambStephen FlanaganSharon SquassoniJohanna Nesseth TuttleWilliam J. Garvelink
JAN 6, 2012

From international security and regional study to global challenges, CSIS experts will address many of the world's most difficult policy concerns and critical questions in 2012. To kick off the new year, we asked 25 of our scholars to identity what worries them most and what are the biggest opportunities in their respective areas of study. Below you will find links to their answers. We hope you find this helpful and wish you all the best for 2012.

Africa in 2012
Jennifer G. Cooke, Director, Africa Program, CSIS

China in 2012
Bonnie Glaser, Senior Fellow, Freeman Chair in China Studies, CSIS

Crisis, Conflict, and Cooperation in 2012
Robert D. Lamb, Senior Fellow and Director, Program on Crisis, Conflict, and Cooperation, CSIS

Cyber Security in 2012
James A. Lewis, Senior Fellow and Director, Technology and Public Policy Program, CSIS

Defense and National Security in 2012
Clark Murdock, Senior Adviser and Director, Project on Nuclear Issues, CSIS

Eastern Europe in 2012
Janusz Bugajski, Senior Fellow, Europe Program, and Director, New European Democracies Project, CSIS

Energy and National Security in 2012
Frank Verrastro, Senior Vice President and Director, Energy and National Security Program, CSIS

Europe in 2012
Heather A. Conley, Senior Fellow and Director, Europe Program, CSIS

Food Price Volatility in 2012
Johanna Nesseth Tuttle, Vice President for Strategic Planning and Director, Global Food Security Project, CSIS, and William Garvelink, Senior Adviser, Project on U.S. Leadership in Development, CSIS

Global Aging in 2012
Richard Jackson, Senior Fellow and Director, Global Aging Initiative, CSIS

Global Health in 2012
J. Stephen Morrison, Senior Vice President and Director, Global Health Policy Center, CSIS

Homeland Security and Counterterrorism in 2012
Rick “Ozzie” Nelson, Senior Fellow and Director, Homeland Security and Counterterrorism Program, CSIS

India and the Neighborhood in 2012
Karl F. Inderfurth, Senior Adviser and Wadhwani Chair in U.S.-India Policy Studies, CSIS

International Trade in 2012
Meredith Broadbent, Senior Adviser and Scholl Chair in International Business, CSIS

Iran as the “New Threat” in 2012
Anthony H. Cordesman, Burke Chair in Strategy, CSIS

Iran in 2012
Arnaud de Borchgrave, Senior Adviser and Director, Transnational Threats Project, CSIS

Japan in 2012
Michael Green, Senior Adviser and Japan Chair, CSIS

Korea in 2012
Victor Cha, Senior Adviser and Korea Chair, CSIS

Middle East in 2012
Jon Alterman, Senior Fellow and Director, Middle East Program, CSIS

NATO and Transatlantic Cooperation on Global Security in 2012
Stephen Flanagan, Senior Vice President and Kissinger Chair in Diplomacy and National Security, CSIS

Nuclear Security and Nonproliferation in 2012
Sharon Squassoni, Senior Fellow and Director, Proliferation Prevention Program, CSIS

Russia and Eurasia in 2012
Andrew C. Kuchins, Senior Fellow and Director, Russia and Eurasia Program, CSIS

Southeast Asia in 2012
Ernest Z. Bower, Senior Adviser and Director, Southeast Asia Program, CSIS

Technology in 2012
James A. Lewis, Senior Fellow and Director, Technology and Public Policy Program, CSIS

Turkey in 2012
Bulent Aliriza, Senior Associate and Director, Turkey Project, CSIS

U.S. Foreign Assistance in 2012
Daniel Runde, Schreyer Chair in Global Analysis and Director, Project on Prosperity and Development, CSIS

Western Hemisphere in 2012
Stephen Johnson, Senior Fellow and Director, Americas Program, CSIS


Jennifer G. Cooke, Director, Africa Program, CSIS

Sub-Saharan Africa will face a multiplicity of challenges in 2012—from a potential unraveling of peace in the continent’s newest state, South Sudan; the failure of governance and accountability in the largest state, the Democratic Republic of Congo; and continuing chaos and humanitarian catastrophe in the continent’s most thoroughly failed state, Somalia. The rise and increasing sophistication of criminal networks—pirates, drug traffickers, militia groups, and violent extremists—add a layer of brutality and complexity that corrode government institutions in some instances and undercut the capacity of even the most well-intentioned states to focus on the big challenges of growth, development, and creating jobs for Africa’s overwhelmingly youthful populations. At the same time, three of the continent’s important “anchor” states—Kenya, South Africa, and Nigeria—face critical domestic challenges in the coming year. Kenya, which promulgated a new constitution in 2010, will face the daunting task of implementation and will head into the first national elections since the divisive and bloody elections of 2007. In South Africa, celebrations to mark the centenary of the increasingly fractious African National Congress and the selection of the party’s next leader take place against a backdrop of glaring wealth inequality, mounting levels of corruption, and rising popular frustration. Nigeria, Africa’s most populous state, is of particular concern and begins the year under acute stress. Continued failure to revitalize the economy of the country’s northern region, terror attacks by Boko Haram, and failure to pass legislation to reform the country’s vital petroleum sector, will ultimately raise questions about the government’s capacity and will to manage. As the year begins, the abrupt elimination of petroleum subsidies—which have led to an estimated doubling in price for domestic consumers—could prove extremely dangerous for the viability of the current Nigerian administration.

The greatest opportunity for sub-Saharan Africa lies in the continent’s projected economic surge in the coming year. Many of the world’s fastest growing economies in 2012 will be in Africa. Even formerly conflict-ridden nations such as Congo-Brazzaville and Liberia are projected to reach double-digit GDP growth this year. Ghana has joined the league of oil producers, Uganda is set to follow, and the discovery of massive natural gas fields off the coast of Mozambique have the potential to dramatically transform the once-impoverished country into a major energy player. Nigeria is among the Next 11 (N-11)—the world’s largest growth economies, which, following on the heels of the BRICS, will be the engine of the global economy. From Tanzania to Angola, Zambia to Mali, Ethiopia to Botswana, a new image of Africa is being shaped—one with an emerging middle class of new consumers making new political demands. The critical challenge will be how well this growth is managed and whether African governments are able to overcome the long-standing impediments of poor governance, corruption, and underfunding of the education, health, and security sectors that in many countries are in a state of disrepair. There is some concern as well that the commodities boom that has fuelled this prosperity could create food price hikes and shortages that (without rebuilding of agriculture) will lead to unrest. And as Tunisia and Egypt showed, economic growth without political reform or equitable distribution of benefits is a recipe for revolution. To maximize this opportunity, African governments will need to prioritize investment in education, building managerial competence, focusing on strategic planning and a strong institutional regulatory environment, the skillful application of technology, and strengthening mechanisms of accountability and responsiveness to popular demands.


Bonnie Glaser, Senior Fellow, Freeman Chair in China Studies, CSIS

The sudden death of North Korea’s leader Kim Jong-il could lead to a major crisis and even military conflict between the United States and China. The succession of power to Kim Jong-un, Kim Jong-il’s youngest son, seems to be proceeding smoothly so far, but it remains uncertain whether regime stability can be preserved. If Kim Jong-un’s rule is challenged in the coming months or years, the regime could collapse, causing civil conflict, refugee flows, or “loose nukes.” That scenario would likely result in U.S. and South Korean forces heading across the 38th parallel to stabilize the country, provide humanitarian assistance, and identify and secure the nuclear and other weapons of mass destruction sites. China might then dispatch the People’s Liberation Army into North Korea, perhaps in response to a request from a military faction that invokes the 1961 Sino–North Korea Treaty of Friendship, Cooperation, and Mutual Assistance. Lack of prior coordination and consultation between China, on the one hand, and the United States and South Korea, on the other, could make it difficult to de-conflict the operations of the three nations’ forces, and shooting could break out that could escalate quickly. In a worst-case scenario, another war could break out on the Korean peninsula. To prevent misunderstanding of each other’s actions and signals and avoid the possibility of such a U.S.-China war that would serve no one’s interests, Beijing, Washington, and Seoul should engage in quiet dialogue now.

The planned visit to the United States in the first quarter of 2012 by Xi Jinping, who is slated to assume the powerful position of general secretary of the Communist Party of China in the fall and the presidency in early 2013, provides an important opportunity to deepen U.S.-China mutual understanding. Xi will likely be in power in China for two terms over 10 years. He last visited the United States in 1987 when he was deputy mayor of Xiamen. Last year, Xi hosted Vice President Joe Biden in China and accompanied him on a visit to southwestern Sichuan Province, the site of the deadly earthquake in 2008. During his trip, Xi will travel to Washington, D.C., and another major U.S. city. More importantly, he will have discussions with President Barack Obama, Vice President Biden, and key business and opinion leaders. Growing economic friction and intensified competition in the security arena are producing a more prickly U.S.-China relationship. Xi’s visit provides a chance for the United States to engage with China’s incoming leader on critically important issues, such as rebalancing the global economy, preventing Iran from going nuclear, and managing potential instability in North Korea. It also presents an opportunity for the United States to underscore the need for a closer and more effective military-to-military relationship and to find ways to cooperate to meet common challenges. Finally, the United States can seek to explain its concerns about Chinese domestic and foreign policies that contravene international laws or norms and listen to Chinese concerns about the U.S. pivot to Asia and U.S. intentions toward China. Candid talks with Xi Jinping can help to ease U.S.-China mutual suspicions and navigate rough waters that may emerge in the relationship in the years ahead.


Robert D. Lamb, Senior Fellow and Director, Program on Crisis, Conflict, and Cooperation, CSIS

The international community faces many ongoing crises, conflicts, and post-conflict situations: Libya, Egypt, the Sudans, Afghanistan, Haiti, Iraq, and Mexico, to name just a few. We should be worried that foreign donors and militaries—the United States included—have not yet put in place the means to manage them effectively. The international community has long acted on a belief that countries affected by conflict and recovering from crises can be “built” into functioning states with help from foreigners. It is an understandable belief, and in fact the international community has done a great deal of good in a great number of places: institutions and infrastructure have been built, civil servants and security forces have been trained, and improvements in the quality of life for millions of people have been attained. But the idea of foreign-supported state building has too often been undermined by its own illusions. The main illusion has been that quickly building up the institutions that are familiar in functioning states will lead, in turn, to the kind of political behavior that makes those states stable. Time and again, this illusion has been shattered by realities on the ground. At this writing, for example, a sectarian political crisis is threatening Iraq’s unity and stability in the immediate wake of the departure of U.S. troops. Libya’s greatest immediate challenge is not that its state institutions are not yet functioning effectively; its greatest challenge is that thousands of armed men, in dozens of militias, are demanding some share of power right now. Those sorts of problems need to be addressed before elections, before legal reforms, before planning for capacity building can be completed. South Sudan likewise faces risks that business-as-usual state building is not well suited to manage. In short, if the international community does not do a better job of understanding and working within the political, economic, and even moral landscapes of the places most at risk, our promises will again exceed our accomplishments, and our efforts in some cases will be ineffective at best and counterproductive at worst.

The good news is that the conventional wisdoms of state building and stabilization are being questioned by enough people that 2012 is likely to see the beginnings of a real change in the paradigm. The global economic crises have led the publics and legislatures of many donor nations to question how effective their countries’ investments in security, stability, recovery, and development have been relative to their costs. Those who have worked in Afghanistan and Haiti (to name just two of the more extreme cases) have witnessed first-hand the effects of too many donors and too many resources flooding into a place ill-equipped to absorb them, and the perverse outcomes of efforts to rapidly develop (some would say impose) modern state institutions in places where they are not (yet?) a natural fit with local processes. Many have come to realize that “spoilers” are not just former combatants and nonstate actors, but often the government officials who are the main beneficiaries of our aid; in fact, it has become clear that the main spoiler is not any particular set of actors, but politics itself. Scholarship on stabilization, state formation, institutional development, and political settlements is starting to be compiled and translated for policy audiences in a much more clear and systematic way than has happened in the past (the 2011 World Development Report has played a catalytic role in this regard). And donors are increasingly, and geniunely, interested in pragmatic solutions, rather than grand visions. The opportunity therefore exists, now more than at any other time in the past decade, to crystallize these insights and ideas into new frameworks for working in complex environments, nonstate-controlled territories, and hybrid political orders.


James A. Lewis, Senior Fellow and Director, Technology and Public Policy Program, CSIS

Every week, it seems, annoying children hack into some website on a quest for vengeance, provoking bellows of consternation in the press. But this is nothing. Every month, people much cleverer than these kids break into the databases of companies and governments. How much would a government pay for advance knowledge of IMF or G-20 financial plans as it designed its own negotiating and investment strategies? How much are the plans for stealthy aircraft or smaller nuclear weapons worth, or the knowledge that you can disrupt an opponent’s military command systems at will? 2011 saw hackers romp without hindrance through other peoples’ networks, as they have done for decades.

Someday we will fix this problem, but it will not be someday soon. The Internet was not designed to be secure; rather, it is run like a university faculty senate, and the software you use is primitive and unsafe. But there are things that can be done next year to reduce risk. Legislation that creates mandatory cyber-security standards for crucial infrastructure would make the United States a harder target. Initial measures to build confidence among nations on how they will use cyber attacks (and they

will use them) could reduce the chance of stumbling into military conflict. These are achievable goals. There are other necessary steps, in law enforcement, technology, governance, and in coming to terms with the political effect of the Internet, but reaching agreement on these will take years. Put critical infrastructure regulation and confidence-building measures in place in 2012, and we will be safer.


Clark Murdock, Senior Adviser and Director, Project on Nuclear Issues, CSIS

The Department of Defense (DoD) most likely faces a succession of defense drawdowns as the defense budget recedes from its post-9/11 peak (about 35 percent above its pre-9/11 level in real terms). DoD is already implementing its first drawdown (the $450 billion over 10 years mandated by the Budget Control Act of 2011) and plans to release its strategy for making this tranche of cuts in early January 2012. However, DoD also faces another $600-billion reduction over the same time period as a result of the sequester mechanism triggered by the failure of the “super committee” to reach agreement on a debt reduction package of at least $1.2 trillion and probably does not have a strategy for determining what its key priorities are if the defense drawdown exceeds, as is likely, the initial $450-billion reduction. In fact, the department’s senior leadership seems to be focusing on fighting off what Defense Secretary Leon Panetta described as “devastating” and “catastrophic” consequences imposed by the sequester cuts—which, even when added to the initial $450-billion cut, reduces the defense budget by a relatively modest 14 percent—rather than preparing for the likelihood that the defense drawdown could be much greater as part of a “grand bargain” on federal spending reductions and tax increases. By not developing a strategy to address the challenge of “doing less with less resources,” DoD is more likely to end up cutting too much of the “right stuff” and keeping too much of the “wrong stuff” for twenty-first century security challenges.

In 2010, Washington reached an “inside the Beltway” consensus on the future of U.S. nuclear forces when the Obama administration issued its Nuclear Posture Review (NPR) in May and the Senate ratified the New START agreement in December. In the NPR, the administration said it would maintain a “safe, secure and effective” nuclear force as long as nuclear weapons exist and sustain, albeit at lower levels, the Cold War triad of nuclear-capable submarines, ICBMs, and bombers. In return for critical Republican support of the New START treaty, the administration backed up its NPR commitments by agreeing to spend $88 billion (over 10 years) on modernizing the nuclear complex and another $125 billion on sustaining and modernizing delivery systems. While this bipartisan agreement covered the programmatic details of maintaining what was essentially a much smaller Cold War nuclear force structure and infrastructure, it did not address, much less build a consensus for, the fundamental issue of the role of nuclear weapons in U.S. strategy in the twenty-first century and what nuclear capabilities, if any, are needed beyond 2020. The 2010 bipartisan agreement on the programmatics of nuclear modernization has been an early casualty in the U.S. government’s implementation of the Budget Control Act of 2011 that passed in August 2011. In his November 14, 2011, letter to Senators John McCain and Lindsey Graham, Defense Secretary Panetta outlined the “devastating” impact of the sequester mechanism on Defense Department force structure and programs. These cuts included delaying the next generation ballistic submarine (and cutting the force from 12 to 10 subs), terminating a new bomber program, and eliminating ICBMs. Many in Washington know that the 2010 deal is unaffordable, but since there is no agreement on the post–Cold War role of nuclear weapons in U.S. strategy, they have no basis for deciding what kind of nuclear capabilities and how much of those capabilities the United States really needs.

During a presidential election year, the U.S. government is usually overwhelmed by politics and partisanship and is incapable of launching bold new policy initiatives or transforming its policymaking processes. This affords policy analysts and advocacy groups the opportunity to develop recommendations and proposals for what a new administration should do, often within the first 100 days, when it does take office. For national security strategists, 2012 is an opportune time for addressing the issue of U.S. grand strategy in the twenty-first century since the war in Iraq is over, the war in Afghanistan is starting to wind down, and the war against al Qaeda, with the killing of bin Laden, is in the end game. Unlike the brief moment of unipolar triumphalism that followed the end of the Cold War, the costs of the nation’s current wars in human, material, and psychological terms have been so great that the context for U.S. grand strategy is constrained and limited. U.S. grand strategy in an era of austerity will necessitate tough decisions about which U.S. interests and values are essential. It will also require tough decisions about how the United States should pursue those goals and what means (military, economic, diplomatic) will be needed to get from here to there. During a time of limits, U.S. grand strategy must chart a course that is sustainable and affordable, particularly when it comes to deciding “how much is enough” for defense and under what circumstances the United States should use military force. It should also seek to answer some fundamental questions about the purpose and future of nuclear weapons in U.S. national security. During most of 2012, the national debate will be about politics and who will govern; this is the time when national security strategists and defense analysts should think through how the new administration should govern.


Janusz Bugajski, Senior Fellow, Europe Program, and Director, New European Democracies Project, CSIS

There are two main areas of concern in the eastern part of Europe as we enter 2012. First, several West Balkan countries still face an uphill struggle in cementing their statehood, ensuring their territorial integrity, consolidating their democracies, and developing productive economies. The financial crisis in the European Union, a decline in trade and investment in the region, together with a less prominent U.S. role, could contribute to renewed conflicts in the coming year. Second, the Central-East European states bordering Russia are closely monitoring the unpredictable outcome of the urban protests against the political system. Vladimir Putin’s return to the Kremlin could also presage new conflicts with Russia’s neighbors if he seeks to mobilize nationalist and imperialist sentiments to undermine public protests and justify his authoritarian methods.

In the Balkans, the opportunity needs to be created to resolve the outstanding questions of Bosnia’s integrity, Kosova’s international membership, and Macedonia’s stability. But this can only be accomplished if Washington and Brussels act in tandem as leaders of the process of EU and NATO accession for each West Balkan state. In Central-Eastern Europe, Washington must remain steadfast in pursuit of the missile shield program and closer U.S. military ties with each NATO member, regardless of threats from Moscow. The White House must also not neglect the opportunity to develop closer ties with Georgia, Azerbaijan, and Armenia, to promote the independence of Belarus and Ukraine, and to be better prepared for political turbulence in both those countries.


Frank Verrastro, Senior Vice President and Director, Energy and National Security Program, CSIS

Energy and geopolitical forecasting has never been an area for either the faint of heart or those without humility. The events of the past two years (e.g., the Gulf oil spill, the nuclear disaster in Fukushima, the Arab awakening, the Euro crisis, etc.)—coupled with ongoing turmoil in Iran, Iraq, Russia, North Korea, Syria, Yemen, Nigeria, and the ever-present need to provide more energy to a growing global population—all point to an evolving energy and geopolitical landscape and both the criticality and fragility of a global supply network under stress.

At his writing, the most obvious choice for a looming “disaster” on the horizon would have to be the consequences of a massive disruption to energy supplies from the Persian Gulf occasioned by Iranian activity. Though for a myriad of economic, political, strategic, and military reasons, this seems to be a potentially high-impact but low-probability event. True, rising prices would severely damage global economies, but on balance the impact on Iran of closing the Strait of Hormuz would be truly catastrophic, leaving one to question the likelihood of such action. Perhaps a more pressing, albeit less dramatic, fear for the coming year is that the current level of (domestic and international) political dysfunction will prevent action and decisions on policy issues that need to be addressed in areas that concurrently advance our energy security, economic prosperity, and environmental well-being. Global energy supplies are most secure when governments, industry, and society at large engage proactively to chart a course for a balanced, stable, and sustainable energy future.

If there was a notable “bright” spot on the energy landscape, it would have to be the growing recognition of the vast unconventional resources both in the United States and elsewhere in the world. The success of shale gas development in the United States has made us the world’s number one gas producer, obviated the need for liquefied natural gas (LNG) imports, and has the potential, if duplicated globally, to both delink oil and gas prices in Europe and elsewhere, while improving regional security and the environment. In the absence of nuclear expansion, the compatibility of gas and renewables can promote lower carbon and local pollutant emissions (although environmentalists remain concerned that, without proper safeguards, lots of low-priced gas will undermine efforts to deploy renewable energy alternatives and still present environmental risks). In similar fashion, the development of tight oil resources using horizontal drilling and hydraulic fracturing (aka “fracking”) has the potential to dramatically increase U.S. oil output, provide economic benefits, and when coupled with efficiency improvements (i.e., CAFÉ standards), reduce import reliance and trade balance payments. Of course, realization of this potential can only be accomplished through accommodation and collaboration between energy developers, regulators, and affected communities—and this should be the focus of industry and government efforts in the years ahead.


Heather A. Conley, Senior Fellow and Director, Europe Program, CSIS

2012 marks the 20th anniversary of the end of the Soviet Union, the signing of the Maastricht Treaty, which created the European Monetary Union (EMU), and two lost decades of internal and external development for Europe and Eurasia. 2012 will be yet another year of painful economic recession, social unrest, and political malaise, but it will also be an inflection point. For the past two decades, Russia attempted to stabilize and reunify internally based on the construct of the Soviet Union, with the use of traditional tools of coercion, trade, and military cooperation. Although Prime Minister Vladimir Putin’s Eurasian Customs Union is the capstone of this effort, Russia becomes less unified and less influential with each passing year.

Europe also attempted to unify and stabilize to adapt to German reunification based on the constructs of nineteenth-century balance of power politics. Although Europe adopted a common currency and common defense and security, these efforts, like Russia’s, have largely failed. Looking to the past for strategic guidance, Europe and Eurasia are ill-prepared for the future. Today, the European sovereign debt and euro zone crisis have deepened and widened to such an extent that there is an increasing risk of economic and political fragmentation not seen since World War II. The European debt crisis is not simply about the daily cost of sovereign borrowing or the poor health of European banks’ balance sheets. There is something far greater at play: average Europeans no longer accept the top-down, elitist decisions and methods of a 60-year endeavor to construct a supranational structure designed to prevent war.

The sense of European unity and destiny has now dissipated as Europeans grow increasingly frustrated by a lack of strategic vision and future narrative. Some in Europe seek alternative narratives in nationalism and populism to fill this vacuum. As Europe weakens economically and loses credibility, power has and will continue to move from European institutions back to the states and, more interestingly, to European-based multinational, global corporations that provide economic growth. Germany—Europe’s economic engine—has begun to pull away from its continental moorings and is taking full advantage of its twenty-first century global economic position. In the future, Germany will find that Europe has little to offer other than to make historical amends, but future German generations will not require this atonement.

The flip side of any crisis is opportunity, and it will be found in fixing the structural flaws of the European project, particularly its monetary union, and positioning it as a strong regional and global economic player. But the new union will look very different than it does today: it will likely bring together those countries (predominantly in northern Europe) that are economically and politically convergent, leaving behind the rest. On the country level, the new Greece and Italy to emerge from this crisis will, one hopes, be far more functional administratively and more competitive moving forward, but the opportunity will take a generation to realize. It is hoped that the social and economic upheaval is not so great during this period as to prevent embracing the opportunity. The danger of this inflection point, however, is that it could rapidly spin out of control. The United States, a critical European power, is increasingly distracted by its own domestic challenges and its focus on the rise of China. If the United States abandons its role as a European power and does not reassert its leadership, we will be watching an unfolding set of crises and new relationships across Europe and Eurasia that the United States will be unable to affect.


Johanna Nesseth Tuttle, Vice President for Strategic Planning and Director, Global Food Security Project, CSIS, and William Garvelink, Senior Adviser, Project on U.S. Leadership in Development, CSIS

Many countries will deal with food price shocks and with hunger. Which countries face the greatest challenges in 2012?

In North Korea, the death of Kim Jong-il in December was also the death of a round of talks for the United States to provide new food aid to a desperately poor and hungry people. North Koreans experienced damaging flooding in 2011 and crop yields were decimated. Some estimate the harvest at only 10 percent of normal yields. The regime change in North Korea leaves a serious question about its ability to manage the food situation. The future for the people and stability of North Korea is very uncertain; it is possible that a growing epidemic of hunger and starvation could spark major instability in 2012. China is likely to provide steady support, including food supplies, to keep the country stable; but China alone will not be able to support the country’s food needs.

In Iran, where declining currency values are straining the people and the government, staple food prices have risen by 40 percent and could continue to rise. Given the tensions in Iran, and the tremendous turmoil in governments and societies in the region, Iran will need to keep up with food prices to promote stability. Maintaining those prices will require increasing amounts of the state’s budget at a time when the West is pushing for increased sanctions.
Burma’s northern state of Kachin will likely face food shortages in 2012. After a 17-year truce, fighting broke out between the government and the Kachin Independence Army in 2011. In the conflict areas, limited planting of the rice crop took place, and subsequently instability interrupted the rice harvest. Farming is the mainstay of Kachin’s population, and rice is the main crop. Outside assistance will be required this year.

In Somalia, drought and famine conditions prevail and are exacerbated by increased conflict between al Shabaab and AMISOM, Kenyan and Ethiopian forces. Population displacements continue, and assistance operations face disruptions. This situation is further complicated by the decision of U.S. banks to no longer transmit remittances from Somalis in the United States to Somalia, a lifeline for many who have no other means of support. Emergency assistance will likely be required for much of 2012.

Most Sahelian countries face food shortages due to low rainfall, poor harvests, and pest infestations. Staple food prices in the Sahel continue to rise. Food shortages are a constant problem in this region of Africa, but conditions have deteriorated. Child malnutrition rates are climbing. While not as severe as conditions in Somalia, the situation requires careful monitoring by the international community, and food assistance will be required in 2012.


Richard Jackson, Senior Fellow and Director, Global Aging Initiative, CSIS

My greatest worry in 2012 is the prospect of continued gridlock in Washington over the budget and particularly entitlement reform. Policy analysts have been warning for decades that unchecked growth in age-related entitlement programs will push the federal budget toward a fiscal cliff when baby boomers retire—but that long-term challenge has now suddenly become a near-term challenge. With the oldest boomers turning 65, the age wave is upon us. Meanwhile, the financial crisis and the huge run-up in the public debt have erased any fiscal room we had to accommodate rising entitlement costs. For the moment, the continuing appetite of the rest of the world for Treasuries fosters the delusion of U.S. invulnerability. But if we know anything about financial markets it is this: First, we will at some point cross a threshold where confidence collapses and foreign capital is no longer forthcoming at affordable interest rates; and second, we can’t know in advance where that threshold is. The result could be a hard landing, accompanied by a free fall of the dollar, draconian budget cuts, and a deep new recession that ushers in a long period of economic stagnation. This would be a disaster, not just for domestic prosperity, but also for international security. With the euro zone stumbling toward breakup and Japan in the midst of a gathering demographic and economic decline, our traditional developed-world allies, even if they were willing, are hardly in shape to play an expanded security role. If the United States can’t lead, no one else will.

Crises always create opportunities as well as risks, and the looming threat of fiscal meltdown may offer the United States the greatest opportunity in a generation to put the nation’s budget—and economy—on a more sustainable long-term trajectory. Admittedly, given the state of partisan politics and the looming presidential election, the smart money is not on a grand budget bargain in 2012. Still, weak business confidence, gyrating financial markets, and growing public alarm over the United States’ fiscal debacle are steadily pushing the debt issue, and along with it entitlement reform, to the front political burner. Even if we careen over the fiscal cliff before taking decisive action, the crash itself might force a salutary reordering of national priorities: not just cost-cutting reform of age-related entitlements, but also a broader rebalancing of the economy toward savings and investment. It might be painful—even brutal—in the near term, but in the long term the benefits would be enormous. With the right policy choices, the result could be economic renewal instead of economic stagnation. At home, we would see renewed economic opportunity for the rising Millennial generation, who increasingly find themselves locked out of the American Dream. Abroad, we would have the fiscal room to make crucial new investments in fostering peaceful development in the emerging world—and in forging the new security alliances on which U.S. and global security will increasingly depend.


J. Stephen Morrison, Senior Vice President and Director, Global Health Policy Center, CSIS

For anyone working in global health, the single biggest worry in 2012 is that the disturbing contraction seen in 2010–2011—of high-level political will, finances, and general enthusiasm—worsens. That is a real risk, in the face of a continued global economic recession, a euro zone crisis, and budgetary woes that have both diminished the resources that low and lower-middle income countries can themselves commit to their countries’ health, and diminished what the traditional wealthy G-8 donor countries can commit to health through bilateral channels and vitally important multilateral instruments like the Global Fund to Fight AIDS, TB and Malaria. 2011 ended with a very visible crisis in the Global Fund—in its finances, its internal management, and its external oversight of investments. Any further surprises could have a long-term crippling impact on the urgent efforts now under way to restore confidence and trust in the fund.

A tremendous opportunity for global health in 2012 will be at our doorstep in Washington, D.C., on July 22–27, when the biannual world AIDS conference—AIDS2012—returns to U.S. soil after a 22-year hiatus. AIDS2012 is an opportunity to speak to an American public about the achievements, at home and abroad, of investments over the past many years in bringing care, prevention, and treatment to people living with HIV. It is an opportunity to celebrate the recent scientific advances in prevention of HIV and the hope that now exists that through sustained commitments we can “begin to see the end of the epidemic” in the coming years. And it is the opportunity to leverage the remarkable coalition that has assiduously supported U.S. leadership on HIV/AIDS: Presidents Barack Obama, George W. Bush, and Bill Clinton; the community of persons living with HIV and other advocates; a broad bipartisan array of congressional members; the American faith community; philanthropic pioneers like Bill and Melinda Gates; and universities, implementing nongovernmental organizations, and the business sector. It will be no surprise that AIDS2012 will feature disappointment and frustration with the pace of change, shortage of resources, and vexing difficulties of reaching marginal, disempowered populations most vulnerable to HIV. But these enduring real-world problems will not take away from appreciating in 2012 the remarkable gains achieved at home and abroad through sustained U.S. commitments.


Rick “Ozzie” Nelson, Senior Fellow and Director, Homeland Security and Counterterrorism Program, CSIS

The growth of radical homegrown terrorism linked to or inspired by al Qaeda and its affiliates will be cause for concern in the coming year. The number of terrorist plots launched by U.S. citizens or legal residents against the United States has increased over the past several years, shattering the belief that U.S. citizens are immune from such radicalism. Although they pale in comparison to the 9/11 attacks, these plots have the potential to do considerable harm, especially in economic terms. Further, given that they are being launched by individuals familiar with the United States and require relatively little sophistication, these attacks may be increasingly difficult to detect and disrupt. The fact that law enforcement officials must pinpoint when a radicalized individual moves from rhetoric to violent action—a nearly impossible task—further complicates detection efforts. While law enforcement has been successful in thwarting some plots, such as those of Najibullah Zazi, who attempted to bomb the New York City subway, and Mohamed Osman Mohamud, who allegedly tried to detonate a car bomb in downtown Portland, others have slipped through. Major Nidal Hasan, reportedly acting alone and armed only with a handgun, allegedly killed 13 individuals in an attack on Fort Hood, Texas. Recent trends may portend an increase in such attacks. In light of the difficulty it has had launching another 9/11-style attack against the United States and the increasingly fragile state of its own organizational structure, al Qaeda is moving to embrace and encourage homegrown terrorism as an alternative method of carrying out its struggle against the West. Al Qaeda and its affiliates are increasingly utilizing information and communication technology, including social networking, to spread their radical narrative of a war between the West and Islam to Western audiences, and they are using English-language spokesmen such as Adam Gadahn, Omar Hammami, and the late Anwar al-Awlaki to convince a small but disturbingly broad array of individuals to not only embrace extremist rhetoric, but to undertake violent action themselves. Given al Qaeda’s growing support for this message of individual action and continued advances in information and communication technology, homegrown terrorism will likely constitute a persistent threat to the United States in the coming year.

In 2012, the United States has an opportunity to revolutionize the manner in which it provides homeland security by embracing a new model based on risk. Since 9/11, we have labored to provide total security, attempting to protect all people, places, and things relatively equally. This approach has, at times, fueled bad policy and practice, and it has required incredible expense. In light of the evolving threat, economic downturn, and reduced federal budgets, such a model will simply be unsustainable. However, transitioning to a model based on risk offers the opportunity to increase both the efficiency and effectiveness of our homeland security efforts. Such a model would use intelligence to target limited resources and apply them where the risk—threat and vulnerability—is greatest. As John Pistole, administrator of the Transportation Security Administration (TSA) recently noted, a flight full of World War II veterans is unlikely to pose the same level of risk, and therefore require fewer security resources, as a flight full of passengers about which nothing is known. Yet under the current system, both flights are treated as equally dangerous. However, while this untargeted model remains in place, the Department of Homeland Security has already begun to experiment with various risk-based systems, including the TSA’s Pre-Check and Customs and Border Protection’s Trusted Traveler pilot programs. Both systems work to expedite screening at various facilities for travelers who have provided certain biographical information, allowing resources to be allocated elsewhere. Such risk-based approaches can and should be applied not just to screening, but across the homeland security enterprise. Through a transition to a system based on risk, we have an opportunity in the coming year not only to decrease costs, but to increase the security of our nation.


Karl F. Inderfurth, Senior Adviser and Wadhwani Chair in U.S.-India Policy Studies, CSIS

At the end of last year, India and Afghanistan signed a wide-ranging strategic partnership agreement, the first such agreement Afghanistan has signed with any country. It shows that New Delhi intends to remain a player in Afghanistan, even as U.S. military forces pull out. Predictably, the strategic agreement set off alarms in Pakistan, which has long viewed its policy in Afghanistan through the lens of countering the perceived danger of being encircled by India on both its eastern and western borders.

As India and others in the neighborhood contemplate the U.S. exit from Afghanistan, one historical ground truth should be kept in mind. That country will never be able to secure its territory and population without the active collaboration and cooperation of its more powerful neighbors and near neighbors, starting with Pakistan and India. India’s new ambassador to the United States, Nirupama Rao, says India has no interest in perpetuating a “proxy war” with Pakistan in Afghanistan. Were the two sides able to agree on that—and act accordingly—it could pave the way for a broader, durable peace in the region in 2012.


Meredith Broadbent, Senior Adviser and Scholl Chair in International Business, CSIS

Effects of the European sovereign debt crisis on the job-creating expansion of global trade and the smooth functioning of the trading system are a serious worry going into 2012. There is the threat that demand for imports in Europe will continue to plummet, with economically depressing effects on trading partners who themselves account for large chunks of global demand, such as the United States and China. However, the legal structure of the bilateral trade relationship between the United States and Europe, it is anticipated, would not be disrupted by potential amendments to the European economic system. Even if countries leave the euro zone, the European Commission will still manage trade relations for Europe from Brussels. But continued falloff in European economic growth rates and domestic consumption could inflict pain on many areas of the global economy. It may become starkly more evident that complex new commercial relationships defined by global supply chains have heightened economic linkages worldwide.

Without a doubt, the greatest opportunity for the United States and the international trading system is the potential for progress in the Trans-Pacific Partnership (TPP) negotiation. Until recently, the U.S. trade agenda was lagging. Multilateral negotiations in the World Trade Organization (WTO) on the Doha Round have been set aside for the moment. But President Barack Obama’s administration has embraced the negotiation of a so-called 21st Century trade agreement with eight other countries in TPP. The United States joined the talks in late 2010. The other participants include Australia, Chile, Malaysia, New Zealand, Peru, Singapore, Brunei, and Vietnam. Eventually it is hoped that the agreement will expand to become the Free Trade Area of the Asia Pacific. The nine participants agreed, at side meetings during the APEC summit in Hawaii in November, to try to complete the negotiations during 2012.

Although many countries were at first skeptical about the depth of U.S commitment to the initiative, two things have changed, making the outlook for success more positive: (1) recent congressional approval of long-pending free trade agreements (FTAs) with Korea, Colombia, and Panama; and (2) a more official suspension of negotiations in the WTO, which was announced at the ministerial meeting in December. As the United States exerts a more credible leadership role, and options for achieving trade liberalization in the WTO appear less and less viable, interest in TPP is ramping up. In fact, at the APEC summit meeting, TPP became the “in” group that many new countries want to join, including Japan, Mexico, and Canada who spoke up officially and asked to be considered for membership in the talks. All eyes are on the United States to propel these negotiations forward in 2012. The United States and its negotiating partners are expected to lay the foundation for an agreement that will expand trade, create jobs, and address new trade disciplines in areas essential to the future competitiveness of the United States.


Anthony H. Cordesman, Burke Chair in Strategy, CSIS

Iran’s steady progress in building up an asymmetric threat in the Gulf, its long-range missile forces, and its capability to produce nuclear weapons is making that nation

the new threat for some policymakers and analysts—at least as important as terrorism and China. The United States has not, however, defined clear policies for dealing with any key issue involving Iran: Iran’s priority relative to other threats in U.S. strategy and force plans; whether the United States can accept containing and deterring a nuclear Iran; the level and efficacy of sanctions; what posture is needed to deal with Iran’s asymmetric buildup in the Gulf and Indian Ocean; and how and whether to encourage regime change. Israel remains a key wild card in the process, as does the uncertainty of Iran’s future role in Iraq, Syria, and Lebanon. An election year is scarcely the best time to try to resolve these issues, but Iran’s nuclear progress is putting steadily greater pressure on the United States to make hard choices.

IRAN IN 2012

Arnaud de Borchgrave, Senior Adviser and Director, Transnational Threats Project, CSIS

Biggest worry? Iran—and the powerful voices that believe there is a military preemption solution, such as bombing of widely scattered nuclear facilities that would, in the opinion of someone with 50 years of experience in the region, trigger a climb in world oil prices to the $300 to $500 per barrel level. This, in turn, would multiply transnational terrorist attacks throughout the Middle East and beyond. Three former CENTCOM commanders and three former Israeli intelligence chiefs who retired in 2011 (Mossad, Shin Beth, and Israel Defense Forces intelligence) have warned against any form of military preemption against Iran.

Biggest opportunity? For President Obama to resist the pressures for a new war front after withdrawing from Iraq and looking for an honorable exit from Afghanistan.


Michael Green, Senior Adviser and Japan Chair, CSIS

It has become fashionable for investors and strategists to casually write off Japan as a global and regional player in recent years. Prime Minister Junichiro Koizumi (2001–2006) seemed to put his country back on the map with his bold foreign policy and embrace of structural reforms in the economy. Since Koizumi stepped down in 2006, however, he has been replaced by a new prime minister each year and the economy has again sputtered out, taking a real blow in the 2008 Lehman Brothers shocks and the March 2011 earthquake, tsunami, nuclear triple disasters. In December 2011, the Japanese government announced it would downgrade its growth projections for 2012 from 2.9 percent to somewhere south of 2.5 percent. Given that much of that growth is recovery spending, these are not good numbers.

As Mark Twain might have said, however, rumors of Japan’s demise are premature. Yes, the country is saddled with a 200 percent debt-to-GDP ratio, a high yen that hampers exports, and a heavy demographic burden. But the nation also has untapped national power that could be used to maintain its status as the world’s number three economy and bring greater dynamism in Japan’s economy and foreign policy. For example, Goldman Sachs has argued that empowering women in the economy would add new energy to GDP growth; Japanese exports and foreign policy influence would be enhanced with participation in more trade agreements (about 16 percent of trade is currently covered by free trade agreements, compared with over 33 percent for Korea); and relaxing the decades-old constraints on the Japan Self-Defense Forces would give Japan more firepower and global presence in peacekeeping without having to radically increase defense expenditures. Other examples abound.

Koizumi began moving Japan in the direction of change in all of these areas, promising to destroy his own Liberal Democratic Party (LDP) if he had to in order to achieve reform. However, his successors in the LDP were far more obedient to the party’s traditional interest groups, such as agriculture, and they lost the public. When the Democratic Party of Japan (DPJ) swept into office in September 2009 on a wave of popular frustration with national politics, that party proved incapable of moving beyond populist antigovernment theatrics to actual governing. The March 2011 tsunami and earthquake paved the way for a pragmatist with a governing philosophy to get the nation back on track.

Prime Minister Yoshihiko Noda has systematically laid the political groundwork for the kinds of changes that Japan needs to restore vitality to the economy and society. Though from the DPJ, he is as ideologically conservative and reform minded as Koizumi. He has declared Japan’s intention to join the Trans-Pacific Partnership (TPP) and by implication reform Japan’s agricultural sector and economy overall. He has approved the dispatch of Japanese forces to Sudan for peacekeeping and has relaxed Japan’s arms export ban, which would allow greater participation in international development—allowing Japan to do more with less. He is gearing up by next spring to revise Japan’s tax system to start closing the fiscal deficit. Most of his opponents within the DPJ have been discredited or are in court (like party strongman Ichiro Ozawa). However, Noda is about as popular (or unpopular) as his predecessors were at this point in their tenure (with negative ratings hovering around positive ratings), and he could end up in the same steep decline in the polls that knocked out his five predecessors in the past five years. The Japanese public is exceedingly unhappy with their politics and could claim their next victim at any time.

In 2012, we could see Noda’s deliberate and forward-looking strategy succeed one step at a time, which would bring much needed confidence to Japan. That would be a good scenario. 2012 could also see Noda stumble, forcing elections and the realignment of Japanese political parties analysts have waited for since the 1990s. (Right now, the two houses of the Diet are held by different majorities and the political parties are jumbled ideologically; the hope is that realignment based on policies would yield a center-right majority with a clearer governing mandate). Of course, it is also possible that 2012 could be another year of muddling through with another failed prime minister and another step toward the day of reckoning when Japan’s domestic savings pool dries up and the government has to subject itself to borrowing abroad with all the disastrous results that has brought Southern Europe. Given Japan’s critical role as the world’s fourth-largest economy, second-largest supporter of international institutions like the IMF, and major base for the U.S. military presence in Asia, these are high stakes.


Victor Cha, Senior Adviser and Korea Chair, CSIS

Both the greatest threat and opportunity over the next year is what follows the sudden death of Kim Jong-il in North Korea. The power succession to his not yet 30-year-old son could lead to more belligerent provocations against the United States and its allies in order to cement his leadership position. Or the power succession could fail, leaving us with dire concerns about who then in North Korea has control of its nuclear arsenal. At the same time, the death of a dictator who starved his people while accumulating nuclear arms could open opportunities for new diplomacy with the West or even Chinese-style reform in that dark kingdom. Which way North Korea goes is unknown and requires serious study.

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Jon Alterman, Senior Fellow and Director, Middle East Program, CSIS

The principal worry in the Middle East this year is that one of the transitions that started in 2011 will go seriously awry. The greatest risk is in Egypt, which is likely to face a “perfect storm” of economic and political challenges in the spring. If current trends continue, foreign reserves will begin to bottom out in March, and there may be a major currency revaluation; at the same time, the newly elected parliament will be seeking to assert itself, the constitution-writing process will be in play, and all parties will be focused on the presidential election slated for June. Egypt is important because it is by far the largest country in the region, it is strategically located, and it has long cast an ideological and cultural shadow on the region. Other places with predictably difficult politics include Syria, where sustained instability could ripple through the region, and Iraq, which has been tilting back toward sectarian tension with the departure of U.S. forces. Unpredictably difficult politics could emerge in Algeria and Jordan, which have thus far been relatively quiet. Instability in Algeria would affect energy markets, and instability in Jordan would upend the security calculations of the entire region. In Iran, the embrace of risky behavior, combined with the potential for miscalculation, create another opportunity to recast the region in 2012.

The greatest opportunity is that governments and populations in the region will engage in a virtuous circle of innovation and accommodation that neighbors will watch and imitate. The particulars of each country are markedly different, yet the solution set of more responsive and capable governments, more supple and inclusive politics, and improved economies bears more similarities. Success in these aspects—whether it comes in Tunisia or Morocco, Egypt or Bahrain—can point the way toward success in other countries, especially in demonstrating ways in which reform can accommodate a broad array of economic and political interests.


Stephen Flanagan, Senior Vice President and Kissinger Chair in Diplomacy and National Security, CSIS

My biggest concern for 2012 is that economic constraints and preoccupation with internal politics will prevent the United States and its transatlantic allies and partners from dealing effectively with looming challenges to their mutual security. While NATO was successful in defending the Libyan people from massacres by the Muammar el-Qaddafi regime and several European governments demonstrated strong leadership, the mission highlighted political divisions about the alliance’s role in global crisis management and major shortcomings in European military capabilities—a consequence of two decades of underinvestment in defense. Given these constraints, it’s also unclear whether the United States and Europe will be able to forge a common approach to supporting positive political change and stability in the Middle East and North Africa. Political reservations about the mission and budget constraints have also led to shortfalls in Europe’s contributions in Afghanistan, particularly to strengthening the NATO training mission that is essential to realization of commitments made at the alliance’s November 2010 Lisbon Summit to ensure a successful transition to an Afghan lead in managing its security by 2014. Allies will confront difficult choices this year in agreeing to further sanctions or other measures to prevent Iran from acquiring nuclear weapons and to counter aggressive military posturing in the Persian Gulf. Finally, while NATO allies and President Dmitry Medvedev of Russia agreed in late 2010 to pursue cooperation in several areas of mutual interest, this part of the reset has languished and could collapse as Prime Minister Vladimir Putin appears to have decided that Russia has not gained enough from this cooperation and that having a confrontational relationship better serves his domestic political interests.

NATO’s May 2012 Chicago Summit provides President Barack Obama and other allied leaders with an opportunity to demonstrate that the transatlantic relationship remains vibrant in the face of economic constraints and is implementing a sustainable strategy for addressing critical challenges to their common security in partnership with other countries. European governments could answer U.S. concerns about diminishing military capabilities, articulated most forcefully by former secretary of defense Robert Gates, and give real content to NATO’s Smart Defense Initiative. Europeans can put a floor on their defense budgets and make more efficient use of still considerable resources through multinational cooperation, better prioritization, and specialization. Allies also have the opportunity to enhance their commitment to training Afghanistan’s security forces and agree on a credible plan for assisting that country in maintaining its security after the NATO mission ends in 2014. European and North American leaders will also have an opening in Chicago—at both the G-8 and NATO summits—to deepen their cooperation and combine scarce resources to support positive political change and stability in the Middle East and North Africa. With agreement by Poland, Romania, and Turkey to accept deployment of U.S. missile defense components on their territory and other initiatives, NATO is poised to realize its commitment to defend alliance populations from the further proliferation of long-range ballistic missiles and nuclear weapons. Allies will also have a chance in Chicago to reaffirm their commitment to missile defense and nuclear deterrence and thereby send a strong signal that Iran’s development of nuclear weapons will not diminish alliance security. Allies can also keep the door open to cooperation on Afghanistan, missile defense, counterterrorism, and other global security challenges with the newly elected Russian president—should he decide to come to Chicago. President Obama will also need to reassure his European counterparts in the wake of his administration’s announced “pivot” to East Asia and likely reduction of military forces deployed in Europe, that they remain, as he said in 2010, America’s “closest partners” and “the cornerstone of our engagement with the world.”


Sharon Squassoni, Senior Fellow and Director, Proliferation Prevention Program, CSIS

Iran is the obvious front-runner in concerns for nuclear proliferation experts, but North Korea is closing in with the death of Kim Jong-il in December. Iran recently announced it can manufacture fuel rods for the Tehran Research Reactor, which reduces any incentives it might have had to swap enriched uranium—a key input for bombs—for fuel manufactured abroad. New sanctions and more aggressive talk from Iranian military leaders may further reduce patience on both sides for a negotiated solution.

Regime transition in North Korea introduces few good possibilities for nuclear nonproliferation. Even if he were interested in concessions, Kim Jong-un would have to consolidate his political power before negotiating with the West. A collapse of the regime, on the other hand, would be a huge challenge to nuclear security.

In the midst of looming crises, opportunities to demonstrate international solidarity on reducing nuclear threats are important, and the Seoul Nuclear Security Summit in March will be a critical one.


Andrew C. Kuchins, Senior Fellow and Director, Russia and Eurasia Program, CSIS

The biggest opportunity in Russia in 2012 is also the biggest worry—that is the sudden and unexpected reemergence of politics and the possibility of political change rendered by Russian society’s response to massive falsification and fraud in the December 4, 2011, parliamentary election, which has brought tens of thousands of citizens into the streets of Moscow twice in the past few weeks since. My outlook is quite optimistic, as relatively prosperous, well-educated, and global Russians have finally awaken from their political apathy and are demanding the real democracy and better governance that the 1991 revolution and Soviet collapse were supposed to usher in. Vladimir Putin may very well be elected president in March, but the highly centralized, authoritarian, and corrupt system he created is starting to erode. “Putinism,” as we have known it, cannot endure. Whether Putin will be willing and capable of the dexterous management required for transition to a more effective and modern political system remains to be seen.

The biggest worry for Russia is the one that Putin’s supporters have warned about for years—that the most likely alternative to Putin’s foreign policy pragmatism would be a far more nationalistic, anti-Western fascist regime in Moscow. Certainly this is possible, and Putin himself could tack in this direction if he feels his regime is in desperate trouble. This sort of scenario could start with a brutal crackdown on a demonstration that could bloody the streets of Moscow and other large cities. The problem with this scenario—and I see this as a very good kind of problem—is that there is not much stomach in Russian security forces for beating and killing their fellow citizens. And this is probably truer today in the face of a venal and corrupt regime than it was 20 years ago when the Soviet empire vanished with barely a whimper. Nevertheless, such a dark scenario cannot be totally dismissed, and the only certainty about Russia’s political future in the coming year is uncertainty.


Ernest Z. Bower, Senior Adviser and Director, Southeast Asia Program, CSIS

The biggest challenge for the United States in Southeast Asia in 2012 will be focus and follow through. In 2011, President Barack Obama and his foreign policy and national security teams made a compelling case that the United States was pivoting toward Asia. He said the Asia-Pacific region will be the center point for new economic growth and security concerns in the first part of the twenty-first century. Asian allies and strategic partners were encouraged by those words, backed up by actions including U.S. leadership in trade with the Trans-Pacific Partnership negotiations and the United States attending the East Asia Summit for the first time, attending the first ASEAN Defense Ministers Meeting Plus (ADMM+), announcing new basing agreements in Australia, and following through with a strong and consistent focus on resolving South China Sea disputes. While 2011 was an impressive year for advancing U.S. goals and engagement in Asia, partners in the region are anxious about the whether the United States can sustain the new level of commitment it has staked out. Most Asian countries have sought a more robust U.S. presence in the region to help convince a rising China to engage in regional frameworks that will result in the collective development of rules around trade and security. They want a China that asks the question what it “should” do instead of what it “can” do. China’s actions in the South China Sea and in maritime areas in northeast Asia in the past year have triggered atavistic anxieties among its neighbors. Accordingly, Asia is concerned about the United States’ financial capability to sustain and expand its presence and questions whether the political bandwidth can be sustained in an election year. In the United States, the natural inclination of politicians in an election year is to focus almost exclusively on issues that will get them reelected. Foreign policy, trade, and national security issues rarely rank high on that list, and campaign professionals assiduously steer their candidates away from these topics. This will present a real challenge for the Obama White House to remain focused and follow through on its commitments to Asian engagement. This White House has already demonstrated its sensitivity to foreign travel and has potentially alienated its labor base with trade agreements. Alarming new levels of partisanship coupled with brinksmanship on budgetary issues in Congress will present additional threats to sustaining the U.S. commitment. Finally, key members of the Obama foreign policy and national security teams are likely to leave their posts in 2012. Losing Asia-focused leaders like Hillary Clinton will present a major challenge for the president. If the United States falters so early in its self-proclaimed new focus on Asia, allies and partners in the region will be forced to ask questions and explore hedging strategies that could undermine the vast potential for new security partnerships, growing trade and investment, and strengthening regional architecture.

The biggest opportunity for Southeast Asia in 2012 is the chance for Myanmar (or Burma) to emerge from the darkness of five decades of repression and self-exile from engagement with the global community. Myanmar’s progress is important to Southeast Asia, for the grouping has been dragging the draconian country around like a ball and chain since it joined in 1997. Substantial actions have backed up the rhetoric of the government, including the release of many political prisoners, reform of laws limiting use of the Internet and restricting the media as well as free association. In addition, opposition leader Aung San Suu Kyi has been released from house arrest, and she and her party will be allowed to run in by-elections planned for early 2012. Myanmar’s reforms offer the United States a substantial opportunity to deepen engagement in ASEAN, which supports the administration’s strategy to use ASEAN as a foundation for building new regional trade and security architecture that will encourage China to work with other Asia-Pacific countries to establish rules governing trade and security that will promote regional peace and prosperity and de-conflict areas of concern such as the South China Sea. Additionally, political reform in Myanmar is indicative of a trend of continued empowerment of people and voters across Southeast Asia. Should this trend hold, regional governments will be compelled to accelerate campaigns against corruption, advancing political reforms and strengthening institutions. These steps augur well for a just and sustainable governance infrastructure in Southeast Asia. Over the coming decade, this trend toward empowerment and governance may have more impact on China than Chinese economic momentum has on Southeast Asia.


James A. Lewis, Senior Fellow and Director, Technology and Public Policy Program, CSIS

The political climate for technology and innovation is the worst it has ever been. This goes beyond denigrating science for political and commercial purposes. Technology depends on pragmatic disciplines like engineering. What happens when ideology displaces pragmatism? U.S. strength erodes. “Starve the Beast” killed the innovation machine that made the United States a global power. Federal investments in the science and engineering workforce; in networks; and in information technologies like computing, sensors, and aerospace laid the foundations for economic and military strength, but the United States stopped making those investments 20 years ago. The private sector is unbeatable at developing new products, but not at basic research or breakthrough technologies. Technological leadership is a fundamental source of U.S. power, but we have forgotten to maintain it.

The current boutique approach to innovation is no substitute. A political process picks the technological flavor of the month—nanotechnology, biotechnology, broadband, ethanol, or solar energy—dabbles and then moves on. Nor are services like Facebook a replacement. Facebook is not scalable. Congress—this is a bipartisan problem—has legislated a national investment portfolio that no one would want to own. The hope that the United States could “de-industrialize,” but stay rich using financial and Internet services, was wrong.

If any of these things worked, we would be doing better. Innovation does not happen in a vacuum. It requires a business-friendly environment (business-friendly need not mean business-dominated); serious investment in education (the model is Dwight Eisenhower’s National Defense Education Act); and stable fiscal policies. U.S. leaders once could assume that technological and economic power would be there for them to use without having to think about where it came from. Those days are gone. We will need to find new ways to remain strong. The innovation machine that won the Cold War is finished, but the basic idea still works: come up with a strategy for technological leadership, then build institutions and make investments to support it. It’s a good goal for 2013.


Bulent Aliriza, Senior Associate and Director, Turkey Project, CSIS

The Bashar al-Assad regime survives, leading to even more serious tensions with Syria, Iran, and to a lesser extent with Iraq. Damascus and Tehran provide backing for the Kurdistan Workers’ Party (PKK) as it escalates its separatist terrorist campaign against Turkey. This prompts Ankara to put greater emphasis on seeking a military solution to its Kurdish problem while putting more pressure on the Iraqi Kurds to act decisively against PKK camps in northern Iraq. The continuing reluctance to make such a move undermines their close relationship with Turkey while reducing the chances of maintaining the post-withdrawal stability that Turkey and the United States are seeking in Iraq. Despite President Barack Obama’s opposition, the Armenian genocide resolution is adopted by Congress, with the help of Israel’s friends unhappy with Turkish policy toward Israel, further undercutting the popularity of the United States in Turkey and making it more difficult for Obama and Prime Minister Recep Tayyip Erdogan to continue their close cooperation, evident in the Middle East during the unfolding Arab Spring. The Obama-Erdogan relationship, based on the hope of Turkey playing a key role between the West and the Islamic world, is also strained by an Israeli or U.S. attack on Iranian nuclear installations despite strong Turkish opposition. Turkey moves closer to rupture in its deteriorating relationship with the European Union as relations worsen with France and Germany and the Greek Cypriots assume the rotating EU presidency. The impressive Turkish economic performance for most of the past decade parallel to the EU accession process begins to falter as the economy falls victim to contagion from the European financial crisis, leading to widespread disaffection and sporadic unrest.

The Assad regime falls in Syria, due to a great extent, because of sustained Turkish-U.S. pressure. This enhances the appeal of Erdogan throughout the Middle East, as well as that of “the Turkish model” as Islamists previously pushed out of the political system in many Arab countries continue to assume power through the ballot box. As the new Arab leaders pledge to cooperate not only with Turkey but also the United States, Obama’s vision of a model partnership between Ankara and Washington helping to improve the troubled relationship between the United States and the Islamic world is further vindicated. The maintenance of coordination between Obama and Erdogan is made easier by a thaw between Turkey and Israel. Ankara cooperates with the new government in Damascus, as well as the Iraqi Kurdish leadership in curbing PKK attacks, helping to enhance stability in Iraq as well as in Turkey itself. There is a renewed political opening by the government toward the Turkish Kurds as the country moves toward adoption through a general consensus of its first civilian constitution. The Turkish EU accession process survives, and encouraged by Brussels, the government pays closer attention to human rights and media freedom. The Turkish economy somehow proves its resilience against the negative effects of the European financial crisis and maintains growth.


Daniel Runde, Schreyer Chair in Global Analysis and Director, Project on Prosperity and Development, CSIS

Nine in ten jobs in the developing world come from the private sector. Our foreign assistance and the way we think about international development increasingly reflect that truth. However, the U.S. government’s instruments, planning, and budget priorities fail to match that reality. The Obama administration has a unique opportunity to improve the instruments the United States has to share risk, primarily through the Overseas Private Investment Corporation and the U.S. Agency for International Development (and possibly the Millennium Challenge Corporation, the Trade and Development Agency, and the Department of State), and tie these resources more closely to technical assistance.

The biggest threat is that we continue on the decades-long path of foreign assistance resource allocation based on interest group preferences and politics, which often leads to less than optimal development outcomes. With increased pressure on the foreign assistance budget, we need to make a number of hard choices—and we need to allocate money based both on shared prosperity outcomes and broader national interests such as national security.


Stephen Johnson, Senior Fellow and Director, Americas Program, CSIS

Despite the fact that Latin American and Caribbean economies, on average, are continuing to grow while commerce has cooled elsewhere, there are clouds on the horizon. Mexican presidential elections could usher in a new administration less committed to curbing the power of drug cartels and combating attendant corruption. That would mean more trouble on the southwest border and in U.S. cities. The power of criminal organizations is growing in Central America, especially in the northern triangle of Guatemala, El Salvador, and Honduras—to the point that stability may be at risk. The death of either Castro brother in Cuba could begin a succession scramble possibly triggering another mass exodus.

However, the most difficult crisis could be the death or incapacity of Venezuelan president Hugo Chávez. Thanks to him, the productive sector has been partially dismantled, the country’s finances are tied up in a tangle of opaque accounts, and countries in his Bolivarian Alternative for the Americas alliance have come to depend on oil, loans, and cash that he has managed to raid from PDVSA, the Venezuelan oil company that is sadly in need of reinvestment. Add to it that Venezuela is now South America’s main drug transshipment hub and that its homicide rate is one of the highest in the world, and you have a situation that could spin out of control. Two wild cards: how will hundreds of Cuban intelligence advisers inside the presidential palace react to the situation? And, how would an economic meltdown affect close neighbors and trade partners like Brazil and Colombia? For now, Chávez is the glue holding Venezuela together. But he is battling cancer and has no visible succession strategy.

Despite those clouds, there are opportunities. Regarding Mexican and Central American law enforcement woes, the United States should become the partner of choice in helping neighbors to build effective justice systems. That we have not done so is because such assistance has been episodic and driven by the threat of the moment—subversion, drugs, terrorism, you name it. And it usually has ended with Congress levying restrictions. It’s time to figure out how to deliver support for broader professionalization without tying it to the flavor of the month. The other opportunity is a sleeper. Now is the time to strengthen our relationship with Brazil. A good way would be to quietly restart talks on a free trade agreement.

Source: Center for Strategic and International Studies, 06 January 2012