Energy and Foreign Policy Predictions for 2013

The year 2012 helped bring answers to a few of the questions that loomed large for foreign observers when the year began. We now know who will lead the United States for the next four years. We have confirmation that the Muslim Brotherhood and its affiliated branches across the Arab Middle East remain the dominant, if often struggling, political force in the countries where revolutions have toppled dictators. And we have learned, to little surprise, that the much-touted efforts by Washington to pivot towards Asia will remain constrained by the pullback from continuing crises in the Middle East, where major long-standing unresolved conflicts—notably the stand-off with Iran over its nuclear program and Israeli-Palestinian tensions—still occupy the front burner.

The distinction between threats and opportunities was not always clear, particularly because a well-managed threat can turn into an opportunity, just as the reverse is true. As expected, the ongoing developments in the turbulent Middle East occupied much of the analysts’ thoughts, suggesting numerous possible outcomes. But other areas of the world and other supranational trends also made the cut.

Here are some of the major scenarios from Wikistrat’s simulation.

Top Negative Scenarios to Watch for in 2013

Desperate, Syria’s Assad Resorts to Chemical Weapons and the West Intervenes

After almost two years of fighting, the course of the uprising against the Assad regime turns a corner. Rebel fighters, whose ranks include a powerful component of jihadi extremists, make significant gains against the regime’s military machine.

As the rebels’ own arsenal grows, partly due to contributions from Gulf states and partly from captured armament, the government loses its unchallenged control of the skies. Fighter jets are shot down, Assad loyalists start defecting in greater numbers and members of Assad’s Alawite sect begin to panic. Despite countless warnings from Washington that chemical and biological weapons constitute a “red line,” Assad, feeling cornered, decides to use them.

The decision gives the West the clear-cut justification it desires to take a more forceful stance. NATO steps in with a coalition that includes Muslim and Arab countries, seeking to wrest control of the fighting and of the regime’s most dangerous weapons.

Like other armed interventions, this scenario presents unpredictable dangers. Once chemical and biological weapons are introduced, the risk of mass casualties is much greater. There is a danger that the conflict could expand, particularly if Iran and/or Hezbollah choose to become involved and decide to draw Israel into battle.

Arab Uprisings – some in progress, some nascent – Pressure Regimes, Destabilize Region

The popular movements that began two years ago and were optimistically labeled the “Arab Spring” continue to raise expectations, create disappointment, and generally roil the region. In places where the revolutions have succeeded in toppling entrenched dictators, the struggle has continued on the political arena, as secular groups spar with Islamist politicians who have won the first rounds of elections. The outcome of these uprisings is not settled. In some cases, a Revolution 2.0 will bring another round of clashes pitting Islamists against secular forces, or moderate Islamists against more radical ones. The potential remains for growing instability.

In countries where existing regimes have withstood the winds of change, particularly Middle Eastern monarchies such as Jordan, Kuwait, and other Gulf states, pressure for reform mounts. Since several of these states (particularly Jordan and Kuwait) have close ties to the West, challenges to the authority of unelected rulers will pose strategic threats and ethical dilemmas for Western leaders.

The end of the Hashemite monarchy in Jordan, with its personal and strategic ties to Washington and a signed peace treaty with Israel, amounts to a disaster for the United States. America and Israel could find themselves in a pre–Camp David situation, in which major wars between Israel and its neighbors break out with regularity.

Hardline Japan PM Brings Increased Tensions with China, others

A continuing economic slump and stresses over the country’s post-Fukushima nuclear choices lay the groundwork for a populist hardline Japanese politician to ascend to the top job.

Under new leadership, the Liberal Democratic Party (LDP) and the Japan Restoration Party (JRP) move to “restore national dignity” by revising the country’s post-WWII pacifist constitution. A key item on the agenda is abolishing and going past the 1 percent cap on defense spending, as well as enabling maritime defense to counter China’s increasingly assertive presence. Defending the contested Diaoyu/Senkaku islands becomes the rallying cry as tensions with China escalate.

The prospect of strong spending on defense gives the economy a temporary boost, but exports to China collapse and the economy begins to contract again, adding to fiscal pressures and feeding the fires of populist rhetoric.

The U.S. tries to calm the situation and avoid becoming drawn in, but the task proves impossible. The conflict intensifies lingering resentments throughout the region, lining up countries that have maritime disputes with China and those that have historical grievances against Imperial Japan.

The crisis threatens to dent a vulnerable global economy.

Al-Qaeda Makes a Comeback in Africa and the Middle East

Although Al-Qaeda has lost many of its top figures, the organization maintains its ability to spawn independent cells capable of playing major disruptive roles in a variety of locations. Regional instability creates the environment that makes it easy for the smaller organization to operate and arm itself, gaining on-the-ground experience and weaponry, as it has during the fighting in Iraq, Libya, and Syria, and taking their expertise to Africa, Asia, and the Middle East.

After Al-Qaeda’s near-defeat following the killing of Osama bin Laden, the organization makes a high-profile comeback, marking its presence in Iraq, Yemen, Nigeria, Mali, Somalia, and even its old home, Afghanistan. Its strengthened position helps it carve a trail of destruction, but also allows its leaders to step up indoctrination campaigns and sharply increase recruiting among disaffected Muslims on all continents.

Al-Qaeda affiliates turn the tide in low-grade conflicts, driving events in Mali and Somalia, and intensifying the ongoing fighting in places like Nigeria and Yemen. The cells have the ability to hijack rebellions and take democratic movements down the path of radical, Islamist, and anti-Western influence.

Iran Goes Nuclear

After years of negotiations with the West, and after repeated assurances that its uranium enrichment program has anything but peaceful intentions, Tehran prepares the world for a major announcement: Its nuclearization is now complete. Iran has reached the necessary threshold of nuclear enrichment and can now produce a nuclear device any moment it chooses. It assures the world it has no desire to build a weapon, but may be forced to because of the Western threats of intervention. Tehran promises to walk back its nuclear progress only if the “Zionist aggressor” agrees to do the same.

Washington and its allies hold urgent meetings to decide whether or not they should attack. The choices are stark: Risk nuclear war or learn to live with a nuclear Iran. Tehran’s Sunni rivals in the Gulf region rush to accelerate their nuclear programs. Nuclear experts from Russia, Pakistan, and North Korea are spotted traveling in luxury to Riyadh, Abu Dhabi, and elsewhere.

Washington launches a diplomatic campaign to reassure friendly Arab regimes that they will be protected by America’s nuclear umbrella. But diplomatic visits to Tehran are also increasing, as countries in the region look at the possibility of siding with Iran. Among the many visitors to Iran are leaders of Hezbollah and Hamas, who take to the stage in Tehran to announce they plan to intensify their own political efforts at home. Hezbollah says it is time for a new political compact in Lebanon, which should be ruled by its Shiite majority. Hamas says it is time for Palestinians to unify and accept Tehran’s offer to give them all of Palestine.

NATO leaders meeting in Brussels watch the speeches on television as they ponder their next move.

Iraq Threatens to Unravel

The first major elections in Iraq since the U.S. withdrawal bring chaos. Prime Minister Maliki miscalculates, believing he can coax his preferred results with a mix of Shiite support and pinpoint fraud. But the country is not so well-disposed. A series of scandals, including a massive multi-billion dollar Russian weapons deal found to have been rife with corruption, each create animosity and mistrust. Maliki’s erstwhile allies, the Sadrists, withdraw their support.

To boost his standing, Maliki resorts to populist anti-Kurdish rhetoric. Tensions between the Iraqi army and the Kurdish Peshmerga militia escalate. Skirmishes erupt with increasing frequency.
At the same time, Al-Qaeda attacks prompt harsh retaliation by security forces, which target Iraqi Sunnis, exacerbating tensions between Sunnis and Shiites.

Muqtada al-Sadr officially rejects Maliki’s rule, accusing him of electoral fraud and of allowing the country to devolve into chaos. Sadr’s Mahdi militia musters for action.

The U.S. scrambles to try to broker peace in Iraq, but its influence is significant only in the north, where Iraqi Kurdish leaders have been in contact with Syrian and Turkish Kurds, discussing the declaration of an independent Kurdistan. Rumors of the announcement bring a greater mobilization of Iraqi forces, along with warnings from Ankara, Damascus, and Tehran that the move will not be tolerated.

Climate Change, Fiscal Woes add up to New Global Recession

As the world’s richest economies struggle to climb out of their fiscal holes through sharp spending cuts that dampen economic growth, a series of unusual climate events – hurricanes, droughts, freakish storms – add to the global economic challenges, helping trigger a global recession.

Sharp spending cuts reduce demand for manufactured products, hurting China’s economy and causing raw material sales from developing countries to collapse. The problem is compounded by a series of unusual weather events whose impact creates agricultural shortages in developing countries and devastates crops in the U.S., Europe, and Asia.

A global recession adds to the political unrest in the Middle East, Europe, and elsewhere.

Top Positive Development Scenarios for 2013

Assad Loses Power, Iran Severely Weakened

After two years and some 50,000 deaths, the Syrian opposition finally topples the regime of Bashar al-Assad. The country struggles to rebuild, and there are worries that jihadists will take control and that Alawites will be targeted for revenge.

More than anything, however, the Syrian people want peace.

As a result, Syria asks for international financial assistance and for help drawing up a constitution that will secure national unity. The World Bank, the State Department, the European Union, and the U.N. send experts to help. Syrians acknowledge that their country is diverse and say they want to keep it so.

The outcome is a disaster for Iran and for its Hezbollah partners in Lebanon. Russia tries to hide its disappointment at the loss of an ally and customer, offering to help with reconstruction. Qatar and Saudi Arabia say they have a lot of ideas for building a strong country. They have a lot of grateful former-revolutionaries in Syria who feel they owe their victory to the Gulf monarchs who helped them most when the West gave them only words.

The West is happy to see Assad deposed and Iran sidelined, but worries about the proliferation of weapons and the murky transition to come.

Post Arab-Uprising Nations Stabilize, Seek Ties to the West

Despite fears of an “Islamist Winter” following the “Arab Spring,” the new governments of Egypt, Libya, and Tunisia surprise the skeptics by turning their focus on stabilizing their economies and bringing political calm.

Islamist politicians miscalculate and overreach, triggering a sharp response from secular forces. The massive anti-Brotherhood mobilization scares the elected Islamist groups and helps build a more coherent opposition. Islamist parties try to preserve democracy because they believe the system favors them. But secular parties manage to flex their muscle enough to make tangible gains.

The quest for economic development – a key requirement if Islamist parties want to continue their electoral success – leads to moderate policies. Those policies include market-based and Western-friendly economic rules, along with cooperation in fighting armed extremists and toned-down rhetoric on Israel.

A New Era in Latin America: Convergence

Venezuela President Hugo Chavez is permanently sidelined by his illness. Despite a period of turbulence in Venezuela, his boisterous style of anti-American, anti-Capitalist “21st Century Socialism” loses its most outspoken and charismatic proponent.

The end of Chavismo happens to coincide with a number of events in Latin America, including the passing of Fidel Castro (who even out of power exerted enormous ideological force in Cuba) and the signing of a peace deal in Colombia between the Marxist FARC rebels and the central government.

As a result, Latin America enters an era of political convergence. The economic and political model enacted by former Brazilian President Luis Inácio Lula da Silva becomes the paradigm for the region. The end of divisions ushers in an era of political realignment that promotes enormous economic growth, slashing poverty rates and making the region a much more influential political player on the global stage.

Increased prosperity helps Mexico and Central America build their capabilities and reduce the recruiting ability of drug gangs. Mexican authorities capture the top drug cartel leaders. With security improving, prosperity makes a strong comeback in the region.

China Means Business

China’s new leadership gains self-confidence after a difficult transition and the country’s leaders decide that the best path to maximize power is to continue an unrelenting focusing on economic growth, despite taunting from Japan and the threat perceived from Washington’s Asia pivot.

The decision to walk more softly helps defuse tensions with Asian neighbors, although hardliners in the Communist Party keep up the pressure, meaning the tranquil waters may not stay permanently quiet.

The decision by Burma/Myanmar to make a diplomatic turn away from China towards the U.S. persuades Chinese strategists to show a gentler hand in the region. The U.S. Senate’s 2013 ratification of the U.N. Law of the Sea Convention clarifies the rules of the game, helping find an accommodation with the Philippines and Vietnam over access to China Sea resources.

Western Economies Recover

Washington manages to avoid the dreaded “fiscal cliff” and the Eurozone slowly but steadily clambers out of its own fiscal crevasse.

Global growth resumes at an unimpressive but steady pace, allowing the West to walk with more self-assurance on the global stage. The West can now offer financial incentives to affect political outcomes, and political stability is restored to Western European nations that had seen massive demonstrations and teetering governments. With the Eurozone now saved, its leaders set out to strengthen the union’s underpinnings and try to reassert Europe’s influence on the global stage.

Energy-Smart America

President Barack Obama surprises the world with the announcement that in his second term he will take all necessary measures to bring about a goal to which he has a deep personal commitment: the development of an “energy-smart America.” The White House issues a series of executive orders, bypassing Republican opposition, aimed at moving the country in the direction of clean energy and much higher energy efficiency standards.

Republicans bemoan the high cost of the new policy, but Obama takes his case directly to the American public, giving speeches and holding high-profile meetings with top executives and leading research centers, starting to identify technologies that are ready for commercial use.

America’s aggressive move towards energy efficiency and environmental responsibility changes the tone of global political debate on the issue, strengthening like-minded advocates and creating, much to everyone’s surprise, a strong push for “energy smart” policies in many other countries, including China.


By  Frida Ghitis, Senior Analyst, Wikistrat. of

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