The new old year

NEW YORK: Any look back at 2012 would necessarily focus on three parts of the world: the eurozone, with its seemingly endless financial uncertainties; the Middle East, with its many upheavals, including, but hardly limited to, the Muslim Brotherhood’s accession to power in Egypt and Syria’s savage civil war, which has already claimed more than 60,000 lives; and the Asia-Pacific region, with its rising nationalism and political tensions after decades of being defined almost exclusively by extraordinary economic growth amid considerable political calm.But which issues will dominate 2013? In no small part, as the French are fond of saying, plus ça change, plus c’est la même chose. Thus, we can safely predict ongoing difficulty throughout Europe, as the countries of the south, in particular, struggle to reduce public spending in order to align their fiscal policies with actual economic capacity.What might be different this year is that France, rather than Greece and Spain, could well be at the centre of the storm. This would pose fundamental, even existential questions for Germany, the other half of a tandem that has been at the heart of the European project since World War II. The likelihood that Europe as a whole will experience little, if any, economic growth will make matters all the more difficult for officials in governments, banks, and regional institutions.Likewise, the Middle East remains in the early phase of a revolutionary transition. In a year, Egyptian President Mohamed Morsi will almost certainly still be in power, but it is not so clear how he will use that power – and what Egypt will look like politically and economically as a result. Recent disagreements over the drafting of a new constitution reveal a deeply divided society and a government that appears to equate (and confuse) majority rule with democracy. By contrast, Syrian President Bashar al-Assad’s regime is likely to have been ousted before the year’s end. But, as we have seen elsewhere in the region, it will prove far more difficult to put something benign and effective in its place. Civil war along sectarian lines could well predominate, or fighting between the various anti-Assad opposition groups could erupt. There is also a real possibility of major upheavals in both Bahrain and Jordan.Finally, the friction in the Asia-Pacific region is unlikely to diminish; in fact, it is far more likely to intensify. The chance of a military incident involving China and one of its neighbors – be it Japan, the Philippines, or Vietnam – cannot be ignored, and it remains to be seen whether the region’s diplomatic circuits can carry the load. New leadership in many of the region’s countries, including China, Japan, and South Korea, make the future even more uncertain.What else can we expect in the 2013? One disappointing probability is that global efforts to fashion new arrangements to promote trade, slow the pace of climate change, or regulate cyberspace are likely to come to naught. Large-scale multilateralism, in which most of the world’s 193 United Nations-recognised countries meet to negotiate accords, has become too unwieldy. Instead, the most we can hope for are small accords among select governments or accords that tackle only a part of much larger problems.The biggest challenge for the world may well be what to do about Iran’s nuclear program. Iran has put into place much of what is needed to produce nuclear weapons. At the same time, sanctions that have been imposed by a substantial set of countries are taking a significant toll on the Iranian economy.There are signs of a growing debate inside the country about whether to press ahead with nuclear weapons – and thus risk not only economic ruin, but also military attack – rather than to accept a diplomatic compromise. Such a pact would place limits on Iran’s nuclear activities and require that it open itself up to more international inspection than it has ever permitted.The main question this year is thus likely to be whether an outcome can be negotiated that is enough for Iran but not too much for the United States, Israel, and others. What is certain, however, is that 2013 will be defined in a fundamental way by whether military action against Iran occurs or is averted.One more country needs to be added to the list of “unpredictables”: the US. The question here is whether the American political system can meet the challenges that it faces, many of which it has aggravated. The US remains the greatest economic and military power in the world, but questions about its solvency have in turn cast doubt on its ability to act and lead in the world. Recent events in Washington have been less than reassuring. Global developments not just in the year ahead, but also during the next decade and beyond, will depend in large part on whether the US can better manage its domestic challenges and divisions.The writer is the President of the Council on Foreign Relations in the United States Copyright: Project Syndicate