AGORA

Sunday, January 26, 2014

Too optimistic? Israel’s and Palestine’s gas and oil

Obstacles still block the flow of oil and gas in the eastern Mediterranean
ARE governments of the Levant fooling their people with false promises of an offshore gas bonanza? From the proceeds, Lebanon hopes to fund a bullet train that will end Beirut’s traffic snarl-ups. Across the water, the Cypriot government has equally grandiose plans. By 2020 a vast new complex in Vasilikos, on Cyprus’s southern coast, is supposed to start shipping liquefied natural gas (LNG) to Europe and even Asia, salvaging the country’s finances. Gas reserves, say Cypriot optimists, amount to 96 trillion cubic feet.
Yet most oil analysts say this is all wildly over the top. Even Israel, whose development of offshore gas is most advanced, is unlikely, they reckon, to start exporting large amounts by 2020, as it hopes.
The sceptics say that the main brake is a lack of regional co-operation rather than a shortage of oil and gas. The Americans’ official Geological Survey estimates that from Gaza’s coast to southern Turkey the eastern Mediterranean holds 122 trillion cubic feet of gas, comparable to the reserves of Iraq. But Lebanon’s caretaker government lacks the authority to pass the legislation needed to persuade foreign oil companies to start drilling; a heralded auction is again likely to be delayed. America’s effort to mediate over a disputed maritime boundary between Lebanon and Israel is stalling progress. The civil war in Syria is scaring away big oil companies. And drilling off the Lebanese coast has yet to begin.
It has done so off Cyprus, but estimates of the amount of gas and oil to be found there have been inflated, too. Delek Drilling and Avner Oil, two Israeli firms involved in exploration, say that Aphrodite, Cyprus’s only proven gasfield, has reserves of just 4.1 trillion cubic feet—barely enough to meet long-term local demand.
Oil companies, including Italy’s Eni and France’s Total, may find more gas there. If not, Cyprus’s LNG venture will depend on getting it from elsewhere, perhaps from Israel’s Leviathan field. In any case, Turkey and Cyprus both claim some of the same stretches of water. The Israelis, for their part, have prevented the Palestinians from developing Gaza Marine, a field off the coast of Gaza where BG (formerly British Gas) found gas a decade ago.
Israel, alone, is romping along. It has verified finds of 35 trillion cubic feet, though the recoverable figure may be lower. Noble, an American company that has so far dominated Israel’s production, says that gas from its Tamar field, which began flowing this year, already supplies 45% of the country’s electricity. But development of the much larger Leviathan field, farther west, is slow. Fearing an outcry over the sale of public assets, Israeli ministers have delayed the timetable.
There are other obstacles. Asian buyers, who tend to pay the highest prices, are reluctant for security reasons to ship Israeli gas through the Suez Canal. Turkey, whose energy needs are soaring, might have been an attractive export market for Israel. Construction of a pipeline on the seabed between Turkey and Israel could prove more profitable than an LNG plant, because upfront costs are lower and Turkish gas prices quite high, says Robin Mills, head of consulting at Manaar Energy, an advisory firm in Dubai. But such a pipeline might have to pass through officially recognised Greek Cyprus and the Turkish-ruled north of the island, so an agreement with both would be needed. That will be tricky. An alternative route, under Syrian and Lebanese waters, would be trickier still.
In any case, Israel is loth to strike an export deal with Turkey at a time when that country’s foreign policy has become unpredictable and its prickly prime minister, Recep Tayyip Erdogan, could turn off the tap whenever he feels piqued. An Israel-Cyprus deal could make matters worse. Egypt’s decision to discard a Mubarak-era agreement to supply 40% of Israel’s gas serves as a warning against doing business amid unresolved conflicts. “Without peace with the Palestinians, we can’t sell our gas to Egypt, Jordan, Turkey and—who knows?—maybe even to the Europeans,” says an Israeli former energy minister, Josef Paritzky.
Tangled in red tape and regional disputes, even oil companies in Israel may flag. Woodside Petroleum, an Australian firm with LNG expertise, is still pondering an ambitious plan to build a floating LNG platform. Noble lacks the capacity to go it alone. Few developers will invest without secure long-term contracts. And buyers in Asia, the best market, are banking on getting an alternative deluge of gas from new finds in the United States. Without exports, regional prospects are less sunny. Ploughing billions of dollars into platforms, rigs, offshore pipelines or costly LNG plants is feasible only if drillers are confident of shipping gas to foreign markets.
For the moment, Noble’s investors say they will be happy with smaller pickings. Israel’s government may have underestimated its own country’s demand for natural gas. Its fast-growing population may need more of it as its economy shifts to gas, for instance to power buses. Jordan, though a smaller market, yearns for a more reliable supplier than turbulent Egypt, and could easily be connected to Israel’s system. Noble has already discussed supplying a Jordanian industrial zone near the Sea of Galilee and the potash plant on the Dead Sea. A short pipeline linking the two countries may be online by 2016. Earlier this month the Leviathan partners signed a deal to supply a Palestinians power station in the West Bank city of Jenin with gas from their field.
Egypt, which until 2012 supplied Israel, might also buy Israel’s gas as demand surges. The idle pipeline that used to pump gas from Egypt to Israel through the Sinai peninsula could be used in reverse, were the local Bedouin to resist the temptation to sabotage it yet again. An undersea pipeline to Egypt’s Nile Delta might offer a safer route. Both routes might one day offer links to LNG plants. Jordan is planning a terminal for LNG at Aqaba, its Red Sea port. British diplomats have also been promoting a plan to link Noble’s fields off Israel’s shore to the LNG plants run by two British companies, BG and BP, at Damietta, on Egypt’s Mediterranean coast.
But even these plans may not come to fruition fast. Mr Netanyahu has yet to endorse a second pipeline to northern Israel, which Noble must build if Israel’s domestic needs are to be met. “Without the pipeline,” says an Israeli close to Noble, “Leviathan will not go ahead.”
Source: http://www.economist.com/

Saturday, January 25, 2014

Ferocious, Weak and Crazy: The North Korean Strategy

Editor's Note: The following Geopolitical Weekly originally ran in January 2013. We repost it as recent turmoil in North Korea returns it to the spotlight.
By George Friedman
North Korea's state-run media reported Sunday that North Korean leader Kim Jong Un has ordered the country's top security officials to take "substantial and high-profile important state measures," which has been widely interpreted to mean that North Korea is planning its third nuclear test. Kim said the orders were retaliation for the U.S.-led push to tighten U.N. sanctions on Pyongyang following North Korea's missile test in October. A few days before Kim's statement emerged, the North Koreans said future tests would target the United States, which North Korea regards as its key adversary along with Washington's tool, South Korea.
North Korea has been using the threat of tests and the tests themselves as weapons against its neighbors and the United States for years. On the surface, threatening to test weapons does not appear particularly sensible. If the test fails, you look weak. If it succeeds, you look dangerous without actually having a deliverable weapon. And the closer you come to having a weapon, the more likely someone is to attack you so you don't succeed in actually getting one. Developing a weapon in absolute secret would seem to make more sense. When the weapon is ready, you display it, and you have something solid to threaten enemies with.
North Korea, of course, has been doing this for years and doing it successfully, so what appears absurd on the surface quite obviously isn't. On the contrary, it has proved to be a very effective maneuver. North Korea is estimated to have a gross domestic product of about $28 billion, about the same as Latvia or Turkmenistan. Yet it has maneuvered itself into a situation where the United States, Japan, China, Russia and South Korea have sat down with it at the negotiating table in a bid to persuade it not to build weapons. Sometimes, the great powers give North Korea money and food to persuade it not to develop weapons. It sometimes agrees to a halt, but then resumes its nuclear activities. It never completes a weapon, but it frequently threatens to test one. And when it carries out such tests, it claims its tests are directed at the United States and South Korea, as if the test itself were a threat.
There is brilliance in North Korea's strategy. When the Soviet Union collapsed, North Korea was left in dire economic straits. There were reasonable expectations that its government would soon collapse, leading to the unification of the Korean Peninsula. Naturally, the goal of the North Korean government was regime survival, so it was terrified that outside powers would invade or support an uprising against it. It needed a strategy that would dissuade anyone from trying that. Being weak in every sense, this wasn't going to be easy, but the North Koreans developed a strategy that we described more than 10 years ago as ferocious, weak and crazy. North Korea has pursued this course since the 1990s, and the latest manifestation of this strategy was on display last week. The strategy has worked marvelously and is still working.

A Three-Part Strategy

First, the North Koreans positioned themselves as ferocious by appearing to have, or to be on the verge of having, devastating power. Second, they positioned themselves as being weak such that no matter how ferocious they are, there would be no point in pushing them because they are going to collapse anyway. And third, they positioned themselves as crazy, meaning pushing them would be dangerous since they were liable to engage in the greatest risks imaginable at the slightest provocation.
In the beginning, Pyongyang's ability to appear ferocious was limited to the North Korean army's power to shell Seoul. It had massed artillery along the border and could theoretically devastate the southern capital, assuming the North had enough ammunition, its artillery worked and air power didn't lay waste to its massed artillery. The point was not that it was going to level Seoul but that it had the ability to do so. There were benefits to outsiders in destabilizing the northern regime, but Pyongyang's ferocity -- uncertain though its capabilities were -- was enough to dissuade South Korea and its allies from trying to undermine the regime. Its later move to develop missiles and nuclear weapons followed from the strategy of ferocity -- since nothing was worth a nuclear war, enraging the regime by trying to undermine it wasn't worth the risk.
Many nations have tried to play the ferocity game, but the North Koreans added a brilliant and subtle twist to it: being weak. The North Koreans advertised the weakness of their economy, particularly its food insecurity, by various means. This was not done overtly, but by allowing glimpses of its weakness. Given the weakness of its economy and the difficulty of life in North Korea, there was no need to risk trying to undermine the North. It would collapse from its own defects.
This was a double inoculation. The North Koreans' ferocity with weapons whose effectiveness might be questionable, but still pose an unquantifiable threat, caused its enemies to tread carefully. Why risk unleashing its ferocity when its weakness would bring it down? Indeed, a constant debate among Western analysts over the North's power versus its weakness combines to paralyze policymakers.
The North Koreans added a third layer to perfect all of this. They portrayed themselves as crazy, working to appear unpredictable, given to extravagant threats and seeming to welcome a war. Sometimes, they reaffirmed they were crazy via steps like sinking South Korean ships for no apparent reason. As in poker, so with the North: You can play against many sorts of players, from those who truly understand the odds to those who are just playing for fun, but never, ever play poker against a nut. He is totally unpredictable, can't be gamed, and if you play with his head you don't know what will happen.  
So long as the North Koreans remained ferocious, weak and crazy, the best thing to do was not irritate them too much and not to worry what kind of government they had. But being weak and crazy was the easy part for the North; maintaining its appearance of ferocity was more challenging. Not only did the North Koreans have to keep increasing their ferocity, they had to avoid increasing it so much that it overpowered the deterrent effect of their weakness and craziness.  

A Cautious Nuclear Program

Hence, we have North Korea's eternal nuclear program. It never quite produces a weapon, but no one can be sure whether a weapon might be produced. Due to widespread perceptions that the North Koreans are crazy, it is widely believed they might rush to complete their weapon and go to war at the slightest provocation. The result is the United States, Russia, China, Japan and South Korea holding meetings with North Korea to try to persuade it not to do something crazy.
Interestingly, North Korea never does anything significant and dangerous, or at least not dangerous enough to break the pattern. Since the Korean War, North Korea has carefully calculated its actions, timing them to avoid any move that could force a major reaction. We see this caution built into its nuclear program. After more than a decade of very public ferocity, the North Koreans have not come close to a deliverable weapon. But since if you upset them, they just might, the best bet has been to tread lightly and see if you can gently persuade them not to do something insane.
The North's positioning is superb: Minimal risky action sufficient to lend credibility to its ferocity and craziness plus endless rhetorical threats maneuvers North Korea into being a major global threat in the eyes of the great powers. Having won themselves this position, the North Koreans are not about to risk it, even if a 20-something leader is hurling threats.

The China Angle and the Iranian Pupil

There is, however, a somewhat more interesting dimension emerging. Over the years, the United States, Japan and South Korea have looked to the Chinese to intercede and persuade the North Koreans not to do anything rash. This diplomatic pattern has established itself so firmly that we wonder what the actual Chinese role is in all this. China is currently engaged in territorial disputes with U.S. allies in the South and East China seas. Whether anyone would or could go to war over islands in these waters is dubious, but the situation is still worth noting.
The Chinese and the Japanese have been particularly hostile toward one another in recent weeks in terms of rhetoric and moving their ships around. A crisis in North Korea, particularly one in which the North tested a nuclear weapon, would inevitably initiate the diplomatic dance whereby the Americans and Japanese ask the Chinese to intercede with the North Koreans. The Chinese would oblige. This is not a great effort for them, since having detonated a nuclear device, the North isn't interested in doing much more. In fact, Pyongyang will be drawing on the test's proverbial fallout for some time. The Chinese are calling in no chits with the North Koreans, and the Americans and Japanese -- terribly afraid of what the ferocious, weak, crazy North Koreans will do next -- will be grateful to China for defusing the "crisis." And who could be so churlish as to raise issues on trade or minor islands when China has used its power to force North Korea to step down?
It is impossible for us to know what the Chinese are thinking, and we have no overt basis for assuming the Chinese and North Koreans are collaborating, but we do note that China has taken an increasing interest in stabilizing North Korea. For its part, North Korea has tended to stage these crises -- and their subsequent Chinese interventions -- at quite useful times for Beijing.
It should also be noted that other countries have learned the ferocious, weak, crazy maneuver from North Korea. Iran is the best pupil. It has convincingly portrayed itself as ferocious via its nuclear program, endlessly and quite publicly pursuing its program without ever quite succeeding. It is also persistently seen as weak, perpetually facing economic crises and wrathful mobs of iPod-wielding youths. Whether Iran can play the weakness card as skillfully as North Korea remains unclear -- Iran just doesn't have the famines North Korea has.
Additionally, Iran's rhetoric at times can certainly be considered crazy: Tehran has carefully cultivated perceptions that it would wage nuclear war even if this meant the death of all Iranians. Like North Korea, Iran also has managed to retain its form of government and its national sovereignty. Endless predictions of the fall of the Islamic republic to a rising generation have proved false.
I do not mean to appear to be criticizing the "ferocious, weak and crazy" strategy. When you are playing a weak hand, such a strategy can yield demonstrable benefits. It preserves regimes, centers one as a major international player and can wring concessions out of major powers. It can be pushed too far, however, when the fear of ferocity and craziness undermines the solace your opponents find in your weakness.
Diplomacy is the art of nations achieving their ends without resorting to war. It is particularly important for small, isolated nations to survive without going to war. As in many things, the paradox of appearing willing to go to war in spite of all rational calculations can be the foundation for avoiding war. It is a sound strategy, and for North Korea and Iran, for the time being at least, it has worked.

Ferocious, Weak and Crazy: The North Korean Strategy is republished with permission of Stratfor.

Read more: Ferocious, Weak and Crazy: The North Korean Strategy | Stratfor
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Friday, January 24, 2014

Sultanate Warns Fresh Conflict in Sabah Possible

Last year’s violence may be repeated if Esmail Kiram II sends troops across the border.
By 
Sultanate Warns Fresh Conflict in Sabah Possible
Image Credit: Beach in Sabah via Shutterstock

Supporters of Filipino claims over North Borneo are again threatening to send armed men to the East Malaysian state of Sabah if Kuala Lumpur refuses to negotiate with Manila, raising fears of a repeat of the violence that erupted there almost a year ago.
The threats came from Sulu Sultanate spokesman Abraham Idjirani, who said the sultanate’s strategy to reclaim Sabah in a peaceful way remains yet warned there might be no choice but to again send troops into the East Malaysian state.
“That is the possibility, if cessation of hostilities will not be resolved,” he said.
His remarks came after Esmail Kiram II, a newly crowned sultan – of which there have been many – urged the government of President Begnino Aquino to pursue negotiations with Malaysia over his family’s claims of ownership over Sabah.
Those claims are based on historical deals where the islands were leased to the British North Borneo Company in 1878. It subsequently passed to Malaysia.
Ownership was never negotiated, however, ancient and indigenous claims are not recognized by international courts when determining sovereign borders, thus limiting any future talks over sovereignty in the region to bilateral talks between Malays and The Philippines.
Esmail became Sultan in October last year following the death Jamalul Kiram III, aged 75.
“Owing to historic and legal facts, it is now incumbent on President Benigno Simeon Aquino III to do what he has to do if our president reckons the inhabitants of Sulu, Tawi-Tawi, Basilan, the Zamboanga peninsula and Palawan as citizens of the Republic of the Philippines,” Kiram II said recently.
Much of the dispute is also about money. Malaysia has traditionally paid a peppercorn rent to the sultans, who once ruled the area, of about $1,500 a year. However, sources have previously told The Diplomat that much more had been paid in secret to keep the peace.
Those payments stopped after the Philippines rejected a Malaysian request to have the issue dealt with as an addendum to peace talks held between Manila and the Moro National Liberation Front aimed at ending much of the conflict which plagued the troubled south for decades.
It was at that point Jamalul sent hundreds of well-armed mercenaries across the maritime border to Lahad Datu – a hotbed of illegal immigrants from the southern Philippines – on Sabah’s east coast, most carrying Malaysian identity papers.
More than 70 soldiers were killed by Malaysian forces while the rest melted in with the ethnic Filipino locals and refugees who control the surrounding water villages, raising fears that the insurgency could again turn bloody on the sultan’s orders.
Further threats have arisen since then but for most Sabahans and millions of others who live on North Borneo, which is shared between Malaysia and Indonesia, the long-absent sultans and their clans hold little relevance in the modern age. In fact, given the death toll that arose at the start of the insurgency, Sabahans would be justified in wondering why Jamalul was not jailed.
Source: http://thediplomat.com/

Friday, January 17, 2014

The Gaza Withdrawal and Israel's Permanent Dilemma

Editor's Note: The following analysis originally ran in August 2005. We repost it today in light of the recent death of Ariel Sharon.
Israel has begun its withdrawal from Gaza. As with all other territorial withdrawals by Israel, such as that from Sinai or from Lebanon, the decision is controversial within Israel. It represents the second withdrawal from land occupied in the 1967 war, and the second from land that houses significant numbers of anti-Israeli fighters. Since these fighters will not be placated by the Israeli withdrawal -- given that there is no obvious agreement of land for an enforceable peace -- the decision by the Israelis to withdraw from Gaza would appear odd.
In order to understand what is driving Israeli policy, it is necessary to consider Israeli geopolitical reality in some detail.
Israel's founders, taken together, had four motives for founding the state.
  1. To protect the Jews from a hostile world by creating a Jewish homeland.

  2. To create a socialist (not communist) Jewish state.

  3. To resurrect the Jewish nation in order to re-assert Jewish identity in history.

  4. To create a nation based on Jewish religiosity and law rather than Jewish nationality alone.
The idea of safety, socialism, identity and religiosity overlapped to some extent and were mutually exclusive in other ways. But each of these tendencies became a fault line in Israeli life. Did Israel exist simply so that Jews would be safe -- was Israel simply another nation among many? Was Israel to be a socialist nation, as the Labor Party once envisioned? Was it to be a vehicle for resurrecting Jewish identity, as the Revisionists wanted? Was it to be a land governed by the Rabbinate? It could not be all of these things. Thus, these were ultimately contradictory visions tied together by a single certainty: None of these visions were possible without a Jewish state. All arguments in Israel devolve to these principles, but all share a common reality -- the need for the physical protection of Israel.
In order for there to be a Jewish state, it must be governed by Jews. If it is also to be a democratic state, as was envisioned by all but a few of the fourth strand of logic (religiosity), then it must be a state that is demographically Jewish.
This poses the first geopolitical dilemma for Israel: Whatever the historical, moral or religious arguments, the fact was that at the beginning of the 20th century, the land identified as the Jewish homeland -- Palestine -- was inhabited overwhelmingly by Arabs. A Jewish and democratic state could be achieved only by a demographic transformation. Either more Jews would have to come to Palestine, or Arabs would have to leave, or a combination of the two would have to occur. The Holocaust caused Jews who otherwise would have stayed in Europe to come to Palestine. The subsequent creation of the state of Israel caused Arabs to leave, and Jews living in Arab countries to come to Israel.
However, this demographic shift was incomplete, leaving Israel with two strategic problems. First, a large number of Arabs, albeit a minority, continued to live in Israel. Second, the Arab states surrounding Israel -- which perceived the state as an alien entity thrust into their midst -- viewed themselves as being in a state of war with Israel. Ultimately, Israel's problem was that dealing with the external threat inevitably compounded the internal threat.

Israel's Strategic Disadvantage

Israel was at a tremendous strategic disadvantage. First, it was vastly outnumbered in the simplest sense: There were many more Arabs who regarded themselves as being in a state of war with Israel than there were Jews in Israel. Second, Israel had extremely long borders that were difficult to protect. Third, the Israelis lacked strategic depth. If all of their neighbors -- Egypt, Jordan, Syria and Lebanon -- were joined by the forces of more distant Arab and Islamic states, Israel would find it difficult to resist. And if all of these forces attacked simultaneously in a coordinated strike, Israel would find it impossible to resist.
Even if the Arabs did not carry out a brilliant stroke, cutting Israel in half on a Jerusalem-Tel Aviv line (a distance of perhaps 20 miles), Israel would still lose an extended war with the Arabs. If the Arabs could force a war of attrition on Israel, in which they could impose an attrition rate of perhaps 1 percent per day of forces on the forward edge of the battle area, Israel would not be able to hold for more than a few months at best. In the 20th century, an attrition rate of that level, in a battle space the size of Israel, would be modest. Israel's effective forces rarely numbered more than 250,000 men -- the other 250,000 were older reserves with inferior equipment. Extended attritional warfare was not an option for Israel.
Thus, in order for Israel to survive, three conditions were necessary:
  1. The Arabs must never unite into a single, effective force.

  2. Israel must choose the time, place and sequence of any war.

  3. Israel must never face both a war and an internal uprising of Arabs simultaneously.
Israel's strategy was to use diplomacy to prevent the three main adversaries -- Egypt, Jordan and Syria -- from simultaneously choosing to launch a war. From its founding, Israel always maintained a policy of splitting the front-line states. This was not particularly difficult, given the deep animosities among the Arabs. For example, Israel always maintained a special relationship with Jordan, which had unsatisfactory relations with its own neighbors. Early on, Israel worked to serve as the guarantor of the Jordanian regime's survival. Later, after the Camp David Accords split Egypt off from the Arab coalition, Israel had neutralized two out of three of its potential adversaries. The dynamics of Arab geopolitics and the skill of Israeli diplomacy achieved an outcome that is rarely appreciated. From its founding, Israel managed to prevent simultaneous warfare with its neighbors except at a time and place of its own choosing. It had to maintain a military force capable of taking the initiative in order to have a diplomatic strategy.
But throughout most of its history, Israel had a fundamental challenge in achieving this pre-eminence.

Israel's Geopolitical Problem


The state's military pre-eminence had to be measured against the possibility of diplomatic failure. Israel had to assume that all front-line states would become hostile to it, and that it would have to launch a pre-emptive strike against them all. If this were the case, Israel had this dilemma: Its national industrial base was insufficient to provide it with the technological wherewithal to maintain its military superiority. It was not simply a question of money -- all the money in the world could not change the demographics -- but also that Israel lacked the manpower to produce all of the weapons it needed to have and also to field an army. Therefore, Israel could survive only if it had a patron that possessed such an industrial base. Israel had to make itself useful to another country.
Israel's first patron was the Soviet Union, through its European satellites. Its second patron was France, which saw Israel as an ally during a time when Paris was trying to hold onto its interests in an increasingly hostile Arab world. Its third patron -- but not until 1967 -- was the United States, which saw Israel as a counterweight to pro-Soviet Egypt and Syria, as well as a useful base of operations in the eastern Mediterranean.
In 1967, Israel -- fearing a coordinated strike by the Arabs and also seeking to rationalize its defensive lines and create strategic depth -- launched an air and land attack against its neighbors. Rather than risk a coordinated attack, Israel launched a sequential attack -- first against Egypt, then Jordan, then Syria.
The success of the 1967 war gave rise to Israel's current geopolitical crisis. Following the war, Israel had to balance three interests:
  1. It now occupied the West Bank and Gaza Strip, which contained large, hostile populations of Arabs. A full, peripheral war combined with an uprising in these regions would cut Israeli lines of supply and communication and risk Israel's defeat.
  2. Israel was now dependent on the United States for its industrial base. But American interests and Israeli interests were not identical. The United States had interests in the Arab world, and had no interest in Israel crushing Palestinian opposition or expelling Palestinians from Israel. Retaining the industrial base and ruthlessly dealing with the Palestinians became incompatible needs.

  3. Israel had to continue manipulating the balance of power among Arab states in order to prevent a full peripheral war. That, in turn, meant that it was further constrained in dealing with the Palestinian question by force.
Israeli geopolitics created the worst condition of all: Given the second and third considerations, Israel could not crush the Palestinians, but given its need for strategic depth and coherent borders, it could not abandon the occupied territories. It therefore had to continually constrain the Palestinians without any possibility of final victory. It had to be ruthless, which would enflame the Palestinians, but it could never be ruthless enough to effectively suppress them.

The Impermanence of Diplomacy


Israel has managed to maintain the diplomatic game it began in 1948 -- the Arabs remain deeply split. It has managed to retain its relationship with the United States, even with the end of the Cold War. Given the decline of the conventional threat, Israel's dependency on the United States has actually dwindled. For the moment, the situation is contained.
However -- and this is the key problem for Israel -- the diplomatic solution is inherently impermanent. It requires constant manipulation, and the possibility of failure is built in. For example, an Islamist rising in Egypt could rapidly generate shifts that Israel could not contain. Moreover, political changes in the United States could end American patronage, without the certainty of another patron emerging. These things are not likely to occur, but they are not inconceivable. Given enough time, anything is possible.
Israel's advantage is diplomatic and cultural. Its ability to split the Arabs, a diplomatic force, is coupled with its technological superiority, a cultural force. But both of these can change. The Arabs might unite, and they might accelerate their technological and military sophistication. Israel's superiority can change, but its inferiority is fixed: Geography and demographics put it in an unchangeably vulnerable position relative to the Arabs.
The potential threats to Israel are:
  1. A united and effective anti-Israeli coalition among the Arabs.
  2. The loss of its technological superiority and, therefore, the loss of military initiative.

  3. The need to fight a full peripheral war while dealing with an intifada within its borders.

  4. The loss of the United States as patron and the failure to find an alternative.
  5. A sudden, unexpected nuclear strike on its populated heartland.
Therefore, it follows that Israel has three options.
The first is to hope for the best. This has been Israel's position since 1967. The second is to move from conventional deterrence to nuclear deterrence. Israel already possesses this capability, but the value of nuclear weapons is in their deterrent capability, not in their employment. You can't deal with an intifada or with close-in conventional war with nuclear weapons -- not given the short distances involved in Israel. The third option is to reduce the possibility of disaster as far as possible by increasing the tensions in the Arab world, reducing the incentive for cultural change among the Arabs, eliminating the threat of intifada in time of war, and reducing the probability that the United States will find it in its interests to break with Israel.
Hence, the withdrawal from Gaza. As a base for terrorism, Gaza poses a security threat to Israel. But the true threat from Gaza, and even more the West Bank, lies in the fact that they create a dynamic that decreases Israel's diplomatic effectiveness, risks creating Arab unity, increases the impetus for military modernization and places stress on Israel's relationship with the United States. The terrorist threat is painful. The alternative risks long-term catastrophe.
Some of the original reasons for Israel's founding, such as the desire for a socialist state, are now irrelevant to Israeli politics. And revisionism, like socialism, is a movement of the past. Modern Israel is divided into three camps:
  1. Those who believe that the survival of Israel depends on disengaging from a process that enrages without crushing the Palestinians, even if it opens the door to terrorism.

  2. Those who regard the threat of terrorism as real and immediate, and regard the longer-term strategic threats as theoretical and abstract.

  3. Those who have a religious commitment to holding all territories.
The second and third factions are in alliance but, at the moment, it is the first faction that appears to be the majority. It is not surprising that Prime Minister Ariel Sharon is leading this faction. As a military man, Sharon has a clear understanding of Israel's vulnerabilities. It is clearly his judgment that the long-term threat to Israel comes from the collapse of its strategic position, rather than from terrorism. He has clearly decided to accept the reality of terrorist attacks, within limits, in order to pursue a broader strategic initiative.
Israel has managed to balance the occupation of a hostile population with splitting Arab nation states since 1967. Sharon's judgment is that, given the current dynamics of the Muslim world, pursuing the same strategy for another generation would be both too costly and too risky. The position of his critics is that the immediate risks of disengagement increase the immediate danger to Israel without solving the long-term problem. If Sharon is right, then there is room for maneuver. But if his critics, including Benjamin Netanyahu, are right, Israel is locked down to an insoluble problem.
That is the real debate.
The Gaza Withdrawal and Israel's Permanent Dilemma is republished with permission of Stratfor

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Elections Don't Matter, Institutions Do

Many years ago, I visited Four Corners in the American Southwest. This is a small stone monument on a polished metal platform where four states meet. You can walk around the monument in the space of a few seconds and stand in four states: Arizona, New Mexico, Colorado and Utah. People lined up to do this and have their pictures taken by excited relatives. To walk around the monument is indeed a thrill, because each of these four states has a richly developed tradition and identity that gives these borders real meaning. And yet no passports or customs police are required to go from one state to the other.
Well, of course that's true, they're only states, not countries, you might say. But the fact that my observation is a dull commonplace doesn't make it any less amazing. To be sure, it makes it more amazing. For as the late Harvard Professor Samuel P. Huntington once remarked, the genius of the American system lies less in its democracy per se than in its institutions. The federal and state system featuring 50 separate identities and bureaucracies, each with definitive land borders -- that nevertheless do not conflict with each other -- is unique in political history. And this is not to mention the thousands of counties and municipalities in America with their own sovereign jurisdictions. Many of the countries I have covered as a reporter in the troubled and war-torn developing world would be envious of such an original institutional arrangement for governing an entire continent.
In fact, Huntington's observation can be expanded further: The genius of Western civilization in general is that of institutions. Sure, democracy is a basis for this; but democracy is, nevertheless, a separate factor. For enlightened dictatorships in Asia have built robust, meritocratic institutions whereas weak democracies in Africa have not.
Institutions are such a mundane element of Western civilization that we tend to take them for granted. But as I've indicated, in many places I have worked and lived, that is not the case. Getting a permit or a simple document is not a matter of waiting in line for a few minutes, but of paying bribes and employing fixers. We take our running water and dependable electric current for granted, but those are amenities missing from many countries and regions because of the lack of competent institutions to manage such infrastructure. Having a friend or a relative working in the IRS is not going to save you from paying taxes, but such a situation is a rarity elsewhere. Successful institutions treat everyone equally and impersonally. This is not the case in Russia or Pakistan or Nigeria.
Of course, Americans may complain about poor rail service and deteriorating infrastructure and bureaucracies, especially in inner cities, but it is important to realize that we are, nevertheless, complaining on the basis of a very high standard relative to much of the developing world.
Institutions, or the lack of them, explain much that has happened in the world in recent decades. Following the collapse of the Berlin Wall, Central Europe went on to build functioning democracies and economies. With all of their problems and challenges, the Baltic states, Poland, the Czech Republic, Slovakia and Hungary have not fared badly and in some cases have been rousing success stories. This is because these societies boast high literacy rates among both men and women and have a tradition of modern bourgeois culture prior to World War II and communism. And it is literacy and middle class culture that are the building blocks of successful institutions. Institutions after all require bureaucrats, who must, in turn, be literate and familiar with the impersonal workings of modern organizations.
The Balkans have been less fortunate, with bad government and unimpressive growth the fare in Romania since 1989, semi-chaos rearing its head in Albania and Bulgaria, and inter-ethnic war destroying the Yugoslav federation in the 1990s. Here, too, a history of lower literacy rates, weak or in some cases non-existent middle classes, and an Eastern Orthodox faith that, because it is more contemplative it does not encourage impersonal standards, at least to the degree of Protestantism or even Catholicism, have all been factors in a weaker institutional basis for economic growth and political stability. Russia, too, fits into this category. Its system of oligarchs is a telltale sign of weak institutions, since corruption merely indicates an alternative pathway to getting things done when laws and the state bureaucracies are inadequately developed.
Then there is the greater Middle East. The so-called Arab Spring failed because the Arab world was not like Central and Eastern Europe. It had low literacy, especially among women. It had little or no tradition of a modern bourgeois, despite commercial classes in some cities, and so no usable institutions to fall back upon once dictatorships crumbled. Thus, what was left in North Africa and the Levant after authoritarianism was tribes and sects; unlike the post-communist civil society that encouraged stability in Central Europe. Turkey and Iran, as real states with more successful urbanization and higher literacy rates, are in an intermediate category between southern Europe and the Arab world. Obviously, even within the Arab world there are distinctions. Egyptian state institutions are a reality to a degree that those in Syria and Iraq are not. Egypt is governable, therefore, if momentarily by autocratic means, whereas Syria and Iraq seem not to be.
Finally, there is Africa. In many African countries, when taking a road out of the capital, very soon the state itself vanishes. The road becomes a vague dirt track, and the domains of tribes and warlords take over. This is a world where, because literacy and middle classes are minimal (albeit growing), institutions still barely exist. The way to gauge development in Africa is not to interview civil society types in the capitals, but to go to the ministries and other bureaucracies and wait in line and see how things work -- and if they do.
Indeed, people lie to themselves and then lie to journalists and ambassadors. So don't listen to what people (especially elites) say; watch how they behave. Do they pay taxes? Where do they stash their money? Do they wait in line to get drivers' permits, and so forth? It is behavior, not rhetoric, that indicates the existence of institutions, or lack thereof.
Elections are easy to hold and indicate less than journalists and political scientists think. An election is a 24- or 48-hour affair, organized often with the help of foreign observers. But a well-oiled ministry must function 365 days a year. Lee Kuan Yew is one of the great men of the 20th century because he built institutions and, therefore, a state in Singapore. For without basic order there can be no meaningful freedom. And institutions are the foremost tools of order.
Because institutions develop slowly and organically, even under the best of circumstances, their growth eludes journalists who are interested in dramatic events. Thus, media stories often provide a poor indication of the prospects of a particular country. The lesson for businesspeople and intelligence forecasters is: Track institutions, not personalities.

Elections Don't Matter, Institutions Do is republished with permission of Stratfor

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