Photo: AFP

Adieu 2012: International scene

MAHMOOD HASAN

As we bid goodbye to 2012 and usher in 2013, let us look back and reflect on some of the major developments around the world. Some of the developments of 2012 may influence world events in 2013.

Arab Spring
Egypt's Muslim Brotherhood is the grandfather of Islamist groups in the Middle East. Since the organization was set up in Ismailia in 1928, its influence has spread across the region and the Arab uprisings of 2011 have presented it with unprecedented political opportunities.

During the past couple of years all eyes were transfixed on the developments in the Middle Eastern countries as one after the other fell to what was satirically called “Arab Spring”.

Tunisia
What began in Tunisia in December 2010 and spread quickly to Libya, Egypt and Syria -- remains largely unfinished even after two years. Though despots have been banished political stability has not been achieved in these countries. Socio-political cohesion remains elusive. Economically too these countries are in extremely fragile condition.

The national elections in Tunisia have returned the Ennahda (Renaissance), an affiliate of the Muslim Brotherhood, to the centre of political discourse. Ennahda claims to be a moderate Islamic Party and says it does not seek an Islamic State. The main challenge facing Tunisia is the tension between the secularists and the Islamists. The debate on 'Sharia' as the basis of constitution has not really ended. Reforms failed to bring tangible benefits to its stagnant economy. Political uncertainty in Tunisia may end once the new Constitution is adopted and fresh elections held.

Libya
Libya, a vast country with only six million people, is bitterly divided. The anti-Gaddafi civil war followed by NATO-led military intervention in 2011 ended 42-year Gaddafi rule.

Elections were held in July 2012 and the National Transitional Council, formed during the civil war, handed over power to the 200-member General National Congress (Parliament) in August. None of the 347 political parties got a majority. Amazingly independents won 120 seats whose political orientation is obscure. A new government led by Prime Minister Ali Zeidan of the National Front for Salvation has taken over. The debate in the Congress over 'Sharia' continues to divide the country and has delayed the new constitution.

During the war massive amount of arms were poured into Libya by NATO to fight Gaddafi loyalists. Those arms are still in the hands of people, who are divided into different tribes. Warring militias and frequent fighting between tribes has made it difficult for Zeidan to run the country. Last September the government failed to protect the US Ambassador, who was killed in Benghazi by armed militias.
It will take a long time to rebuild and achieve political stability in Libya.

Egypt
President Morsi is in the thick of a constitutional battle. People were back at Tahrir Square in November, demonstrating against Morsi, for issuing a Decree by which he had assumed wide legislative powers.

In June the Supreme Constitutional Court declared that the January 2012 Elections were void. That led to the dissolution of the lower house of Parliament. A three-way power struggle started soon after Morsi was sworn in as President – the Presidency, the Mubarak-era Judiciary, and the Military.

A hurriedly drafted constitution was put to referendum and approved in December. But it left the nation deeply divided between the Islamists and the liberal secularists. The liberals led by El Baradei say it was a partisan charter based on “Sharia”.

Basically the fight is between the remnants of the old regime and the newly-elected President. Theories of counter-revolution abound. Unless the government resolves political differences and revives the stagnant economy, Egypt's journey towards democracy will face more hurdles in the coming year.

Syria
The destructive civil war that erupted in Syria in January 2011 continues without any sign of resolution. Syrian opposition want Bashar Al Assad's 4-decade old Baathist regime ousted. Assad is an Alawite, a minority Shiite Sect in a Sunni majority country. The armed conflict between the Assad forces and the Syrian Free Army has already cost 40,000 lives.

The joint UN-Arab League envoy Kofi Annan sought to mediate but failed. The UN also sent Peace Keepers to separate the belligerents and bring them to the negotiating table. That too failed.

World powers are deeply divided over how to resolve this conflict. Syria has become the playground for the big powers' proxy war. The Western countries have already recognised the Syrian opposition coalition as the “legitimate representative” of the nation. The Russians support Assad but is in dilemma on how to resolve the conflict. UN mediator Lakhdar Brahimi also gave up his mission.

With Western arms and funds, the Syrian opposition will fight on to oust Assad. It will no doubt be a long war. Whether the post-conflict government will be a moderate Islamic or an Al Qaeda influenced outfit, no one knows.

Palestine
The other trouble spot in the Middle East is the Palestinian-Israeli conflict. Last November, Israel and Hamas in Gaza fought an 8-day war, pounding each other with rockets and missiles. A ceasefire was eventually arranged by Egypt, with American assistance.

Later in November the Palestinian National Authority led by Mahmoud Abbas, secured “non-member observer state” status at the United Nations. That was a big diplomatic blow to Israel. Palestine is now recognised as a “state” and can enjoy privileges as other states do. Under international law Palestine is a “state” under occupation of Israel.
There are strong signals that Hamas and Fatah shall reconcile and put up a joint negotiating stand against Israel.

A Palestinian man reacts during a rally in the West Bank city of Ramallah on November 29 when the UN General Assembly approved a resolution to grant Palestine observer status, implicitly recognising a Palestinian state. Photo: AFP

These developments changed the military and diplomatic equation between the Palestinians and the Israelis. Israel has hardened its position towards the Palestinian National Authority and announced building of new Jewish settlements in East Jerusalem.

Changes due to “Arab Spring” have made Israel less secure now than it was two years ago. There is strong international pressure to resume the peace process, which has been stalled since 2010.

Iran
Another area of concern is the confrontation between Iran and the West over Iran's nuclear program. Iran repeatedly denied any nuclear weapons program, but failed to convince the West. The matter was hyped by Israel clamouring that Iran was about to explode a nuclear device – and that Israel had the right to launch an attack and destroy Iranian nuclear facilities.

Strictest economic sanctions were imposed on Iran by the UN and US. War rhetoric from Israel and the West continues. American and British naval forces keep manoeuvring in the Strait of Hormuz, threatening Iran. The world only wishes that hostilities do not eventually breakout to engulf the entire region in fire.

Europe
Europe has been in serious turmoil during the past year. Mismanagement of the common currency “Euro” by several countries threatened to disintegrate the oldest regional club – the European Union.

Portugal, Ireland, Greece and Spain (PIGS) expanded their budget by external borrowing, little realizing that their economic growth was stagnating. As revenues fell – the budget deficit widened. To cover the deficit governments went for larger external borrowing. As recession set in, their GDP shrank. Soon they reached the catastrophic point when they were unable to pay back the lenders. Since an individual country could not devalue the Euro to revive their economies -- the debt burden continued to mount. This created an enormous pressure and threatened the collapse of “Euro”.

To save these countries from economic meltdown the European Central Bank (ECB) and the IMF advanced billions of Euros to bail them out. To bring discipline in economic management European Summits stipulated that these countries have to increase tax revenues and exercise strict austerity in government spending. These harsh measures led to public outrage and change of governments in Portugal, Ireland, Spain, Greece, Italy and France.

The crisis sparked debates in many defaulting countries that it would be better to leave the Eurozone, rather than exercise austerity and accept bailout funds. Britain which never joined the Eurozone is touted to be on the verge of leaving the European Union. There are also gossips that Scotland may declare independence. Similarly, Catalonia is agitating to free itself from Spain. All these centrifugal forces are at work in the EU because of the dire economic condition in Europe.

Russia
There have been several important leadership changes in some powerful countries. Russian Presidential election was held in March 2012 that put Vladimir Putin's “United Russia” party in the lead. Four other contestants fell out as they failed to register enough votes.

What is intriguing is that the Russian constitution allows the Prime Minister to become President and the President to be Prime Minister. Putin was Prime Minister under President Dimitry Medvedev. They switched positions in May. In his third incarnation as President of Russia, Putin is particularly wary of the West.

France
France also held elections in April, which bid farewell to Nicolas Sarkozy and installed the Socialist leader Francois Holande as President. Sarkozy messed up the French economy and had to quit after his “Union for Popular Movement” lost the confidence of French voters.

French economy is also going through recession. French government debt reached 1,833 billion Euros in 2012, which was equivalent to 91 % of French GDP.

Germany, the leading member of EU, insisted on austerity in government spending to revive the stagnant economies of Europe. Hollande, opposed to the idea, emphasized growth instead. He wanted to increase corporate tax and income tax on the wealthy to increase revenue. With increased revenue Hollande was trying to reduce the budget deficit. It is a Catch-22 situation – reducing deficit to balance the budget is a good move. But austerity in government expenditure creates unemployment.

Hollande has been struggling to reduce unemployment and stimulate the economy. But the French economy does not look good.

USA
Another important election was that of the United States President. Americans were busy throughout 2012 with this expensive yet important election. Many had predicted a landslide for Mitt Romney, the Republican challenger. In the final run up though, incumbent Barack Obama held on to the White House.

What is bizarre is that wily American voters gave Democrat Obama a second term, while they elected the House of Representatives with Republican majority and the Senate with Democrat majority. This was a recipe for continuous stalemate in government. Passing any law would become extremely difficult for President Obama.

During last weeks of December, Obama fought a bruising battle with the Republicans to stave off what was known as “Fiscal Cliff”. The Fiscal Cliff could have led to a recession in the US economy, which was showing signs of recovery.

The President's plate will be full with domestic and foreign policy issues, and keep Obama busy for the next four years.

China
The 18th National Congress of the Communist Party of China, held in November in Beijing, unveiled the names of the new leaders of the Politburo Standing Committee (PSC). Xi Jinping, was named the Secretary General of the CPC and shall lead China for the next ten years. He will be formally inducted as President at the National People's Congress in March 2013. Li Keqiang, the second member of the Politburo Standing Committee, will become the Prime Minister.

Though many questioned Xi Jinping's ability to lead China, there is no sign of any change in Policy. The collective leadership of the 7-member PSC will continue with the same policies as in the past.

Japan
Japan too went for general elections in December last year. The centre-right Liberal Democratic Party (LDP) along with “New Komeito” party commands two-thirds majority. The LDP, which was in power for most of the time since 1955, was defeated in 2009 by a new centre-left political outfit, known as “Democratic Party of Japan” (DPJ).

LDP leader Shinzo Abe, became the seventh Prime Minister in six years. The LDP government favours pro-nuclear energy policy despite last year's Fukushima disaster and shall introduce easy monetary policy and big fiscal spending to beat deflation and tame the strong yen. It will be interesting to see how hard line Abe interacts with the new leadership of China in the dispute over the isles in East China Sea.

The past year has not been economically favourable for the developed world or for the third world countries. Political developments in some regions also cause worry as these have portents of larger conflicts. Let us hope world leaders will try to promote peace and understanding among nations in 2013.

The writer is former Ambassador and Secretary.