AS THE WORLD TURNS: THE 5 PIVOTAL ISSUES OF 2016
BY JOHN MCLAUGHLINJAN 102016
The author, deputy director and acting director of the CIA from 2000 to 2004, teaches at the Johns Hopkins School of Advanced International Studies.
Those of us who’ve worked on foreign affairs for decades disagree often and about much, but the advent of 2016 finds us all in agreement, to the point of cliché, on one thing: We’ve never seen a world so chockablock full of complex, dangerous and interlocking issues. For anything comparable in modern times, you’d have to go back to the late 1940s and the chaos following World War II.
Prediction now is as perilous as it was back then. Dozens of issues are rushing toward us, headlong, but we’re plunging in and highlighting the five biggest global issues of 2016: Syria, Iran nukes, China, Russia and the EU, and oil prices. In each of these areas, changes in one direction or another would be truly consequential — that is, they would ripple out broadly, like rocks thrown into the geopolitical pond.
To be sure, other issues, like cybersecurity, North Korea and climate change, will have short- and long-term effects, and, of course, no one is thinking about what inevitably will surprise us. Still, it’s a safe bet that the following five will absorb much of the world’s foreign policy attention in 2016. Here’s why:
1. Dealing With Syria
The country, now heading toward year five of a gruesome civil war, must come first. How the conflict evolves in 2016 will affect everything from the fate of the Islamic State to the European migration crisis, the stability of regional neighbors, volatility on the oil market, the status of Russia, and the terrorist threat level inside the United States.
The U.S. is pursuing a two-pronged strategy: gradually increasing military pressure on the IS by bombing, while seeking a diplomatic settlement satisfactory to Syria’s competing factions and the major powers trying to protect their conflicting interests — the U.S., Russia, Iran, Saudi Arabia and Turkey. The big benefit of this strategy is that it minimizes the United States’ chances of getting sucked into a quagmire.
But the big risk is that it is eminently gradualist — and assumes that the Islamic State is gradualist too. That is wrong. The IS continues to grow rapidly and expand geographically. Despite some recent setbacks – Iraqi forces appear close to recovering Ramadi city – the IS will likely achieve the capability to carry out or inspire more attacks like those on Paris and San Bernardino long before our gradualist strategy achieves its goal.
2. Nukes in Iran
This year will see the success of the Iranian nuclear agreement, or its failure. The United Nation’s International Atomic Energy Agency had to report in mid-December on Iran’s initial compliance. It noted some Iranian shortcomings, particularly its stonewalling on past nuclear weapons research, which the IAEA is convinced did occur. But the agency did not recommend halting implementation of the agreement. All of this and Iran’s probing for soft spots in the agreement, such as missile tests that defy U.N. resolutions, augur a rocky process.
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Iran will probably get what it wants most: the lifting of some economic sanctions this month. The agreement, if observed, could delay an Iranian bomb by a decade or more, but the U.S. is in a quandary: If it gets into a fight with Iran over claimed violations, Tehran could pull out and again be just months away from a nuclear weapons capability. In other words, back to square one. Watch Iran push the limits, and the U.S. and its partners give Iran the benefit of the doubt unless it violates the agreement blatantly or is caught cheating.
3. China, the Quivering Giant
China will continue to cast a long global shadow in 2016. President Xi Jinping is trying to steer his country of 1.3 billion people through a tricky transition from an outmoded economic model to a new one, with the Communist Party’s standing in the balance. The old model — cheap labor = cheap exports = high growth — has lost steam, and economic growth, the bedrock of one-party rule, is now the lowest it has been in 25 years. Xi has shaken the Communist Party with an unprecedented anti-corruption campaign and is trying to shift the economy to service industries and information technology. Watch the growth data: China says it needs at least 6.5 percent to meet public expectations and keep forward momentum in the economy.
China, by virtue of its size and the security organs of the Communist Party, has a way of defying punditry rumblings about potential instability. Still, conditions in 2016 will be more challenging than in a typical year — and recent years elsewhere have been anything but typical.
4. Russia and the EU
Much of what we take for granted about world order is on the line in the nexus of Europe and Russia. Russia’s invasion of Ukraine three years ago broke long-accepted international law. Russian President Vladimir Putin tacitly acknowledged as much with his year-end admission that Russian troops are inside Ukraine — something he had long denied. Low-level skirmishes now mark the conflict, but the coming year will carry the ever-present prospect of escalation.
Meanwhile, the 28-member European Union continues to struggle with a politically polarizing migration crisis and worries about the British referendum on membership that could take place as early as mid- to late 2016. The Brits will probably tip toward staying in, but referendums are notoriously unpredictable. A U.K. withdrawal would shake the EU to its foundations.
5. Oil, the X Factor
Oil has long been the X factor in international politics. Its availability and market price have driven the international behavior of many countries and determined the domestic character of others. The world is now awash in oil and its price has sunk to the lowest point in six years, hovering around $40 a barrel, or less. Credit increased U.S. production, conservation, China’s slowdown and key producers pumping at record rates in a race for market share.
Prices are unlikely to change markedly in 2016, and we will see greater impact in countries whose economies depend primarily on oil. Already their economic foundations are going wobbly. To meet its budget, Russia needs prices of at least $100 a barrel. In Venezuela, the crashing economy has helped conservative oppositionists. And Saudi Arabia has lately drawn down its hard currency reserves faster than it can replace them, in order to sustain social programs and subsidies. The Kingdom recently lowered subsidies of gas, and is reportedly contemplating levying an income tax. Political shake-ups within any of these countries would, of course, have ramifications far beyond their borders.
OZY AUTHOR SENIOR CONTRIBUTOR
John McLaughlin is the former deputy director of the CIA. He writes a regular column on OZY called “The Spy Who Told Me” and teaches at the Johns Hopkins University’s School of Advanced International Studies (SAIS).
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