Barack Obama is back and China has a new leader in Xi Jinping, but world leaders face heavyweight issues in the coming year, from lingering economic crises to bloody tumult in the Middle East:
ECONOMIC CRISES IN THE UNITED STATES AND EUROPE
“No ‘foreign policy’ issue in 2013 will matter as much to global economic, political, and ultimately security conditions as whether the United States and Europe are able to deal with their economic crises,” Jessica Mathews, president of the Carnegie Endowment for International Peace, wrote in “Global Ten: Challenges and Opportunities for the president in 2013.”
Unless a deal is reached between US President Obama and his Republican opponents by the end of 2012, the United States will plunge off the “fiscal cliff” — a toxic combination of tax hikes and spending cuts that could trigger another recession in the world’s biggest economy.
“If America’s political parties can agree on a way to climb down from the fiscal cliff, the resolution of the acute economic uncertainty that has gripped the country for the past 18 months would unleash private sector investment, spark an economic recovery, and give new capacity and weight to the country’s international role,” Mathews said.
As for Europe, “the challenge is still to summon sustained economic discipline and political will,” explained the American expert. “The euro crisis morphed in 2012 from a life-threatening emergency to a chronic disease that will be with us for years to come,” she said, warning countries like France, Italy, Portugal and Spain of the need “to maintain the harsh treatment, avoid setbacks (in France, especially), and continue to inch toward restored growth.”
Eurozone GDP is forecast to contract by 0.3 percent next year, but Justin Vaisse, director of research on the United States and Europe at the Brookings Institution, said he believed that the worst of the euro crisis is behind us. “The Americans and the markets have concluded that the euro will not explode, otherwise it would have fallen and there would have been a flight of capital,” he told AFP.
The French expert is worried, however, about the effects of the global slowdown on China.
Vaisse envisaged a gloomy scenario in which the euro area “cuts Chinese imports drastically due to a deeper than expected recession,” causing “political, social and geopolitical consequences in China.”
“China’s outgoing leadership, after years of stellar economic growth, could afford to allow growth to slow and politico-economic problems to accumulate. Xi cannot,” noted Mathews.
CHINA, TERRITORIAL DISPUTES WITH NEIGHBORS AND THE US ROLE
As tensions rise in the South China Sea, experts are increasingly fearful of an arms race or even armed conflict in the Asia-Pacific.
Seemingly innocuous territorial disputes over remote archipelagos could flare into military conflicts between China, Japan and South Korea. The United States has a military alliance with Japan but has so far refused to take sides.
China’s “neighbors look at the US as the distant balancer, the country that to some degrees balances the military and the political power of China, which would otherwise have an easier time in completely dominating the region,” said former US secretary of defense Harold Brown, a counselor for the Center for Strategic and International Studies (CSIS).
The Iranian nuclear crisis remains “the burning issue” of 2013, with “a reasonably high chance of a serious regional conflagration,” Vaisse said. The major powers and Israel suspect Tehran of developing atomic weapons under the guise of a civilian nuclear program, charges denied by the Islamic republic.
As Iran stubbornly continues to enrich its uranium “the logic of the last decade of pursuing sanctions coupled with negotiations has been exhausted,” said Vaisse.
Brown, however, said sanctions were having a big effect and called for a real offer to reduce them in return for Tehran abandoning or at least freezing its uranium enrichment.
“I would not rule out the air attack on the Iranian nuclear facilities because they should know that it remains a least a possibility,” he added.
Experts envisage that Syrian strongman Bashar al-Assad’s Damascus could fall to rebel forces around Christmas and foresee the beginning of an “international consensus,” thanks to a softening of Russia’s position.
This should allow in 2013 for “the beginning of what will be a long, difficult political transition,” said Mathews.
Vaisse reckoned it was “possible that the civil war resolves itself,” but said “there will still be the need for Western intervention to maintain order and stability.”